Member Benefits
The AFM Pension Fund-How Good is it?
What is the AFM-EPF?
The AFM and Employers' Pension Fund is a defined-benefit, multi-employer plan that is protected under Federal Law.Huh?
The Fund is like an annuity or Social Security: when you retire, you get a check every month for the rest of your life. The Fund is also a multi-employer plan, so you can participate by playing in an orchestra, playing on a recording, or playing a gig in a club…there are many ways to fund your pension, even on gigs you play where you file contracts yourself.How do I get Pension?
If you play on a gig or recording session with an AFM Union contract, you’re already getting pension credits. If you’re playing a wedding or at a club or have a corporation, there are ways for you to file your own contract and make contributions on your own behalf. With a minimum contribution made each year, it takes five years to become vested, at which time you cannot lose credit for any contributions made, even if you never play a gig again.Is it Safe?
The AFM-EPF is no Enron. For starters, the Fund exists solely to provide pension benefits to participants…they don’t have a “side” business that could go bankrupt, taking pension money with it. It’s also a multi-employer plan, so if one organization were to stop participating, there are many others left to continue making contributions. The Fund, with over $1.7 billion in assets, is actually ranked in the top 1% of pension funds nationally. And of course, all pension funds are regulated and insured by the Federal Government.Why Don’t I just get an IRA?
Well, for starters, you can only put $4000 a year into an IRA; your AFM-EPF contribution can be as much as 15% of your total income. If you start early and are good at investing, your IRA might do well (compounding is an amazing thing). Just don’t retire during a recession! But since the AFM-EPF has over 45,000 participants and over $1.7 billion in assets, they’re much better prepared to weather a few bad years in the market. Assuming you make a contribution at age 40 and retire at age 65, here are some numbers to compare:| AFM-EPF | IRA or other tax-sheltered account | Regular Savings Account | |
| Contribution | $1000 | $1000 | $1000 |
| Deduct Taxes Paid | $0 | $0 | $250 |
| Rate of Return | n/a | 5% | 5% |
| Value at Retirement | n/a | $3481 | $2611 |
| Annual Return | $407.40 | $232.06* | $174.06* |
| Total Return at age 80 | $6111 | $3481 | $2611 |
* (based on equal withdrawals to deplete funds by age 80)
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