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Chasing JPMorgan: On AFTRA, Retirement, and Merger

0412 money
Just in case you forgot, the folks who perpetrated this whole worst-financial-crisis-since-the-Great-Depression thing were bankers. Not public school teachers, not undocumented Mexican immigrants, and not whoever thought remaking “Arthur” with Russell Brand was a good idea. They were bankers, people—cigar-chomping, orphan-kicking, Rich Uncle Pennybags–looking bankers. And they deserve your scorn.

Ah. That felt good. Anyway, The New York Times reported Sunday on a lawsuit by three JPMorgan Chase clients who claim that the bank kept $500 million of their money in an investment vehicle called Sigma long after top JPMorgan executives had begun to express doubt about that vehicle’s stability. Sigma collapsed in 2008, and now the plaintiffs—three pension funds—want their money, honey. The Times story is a gentle reminder of just how we ended up with this crap economy, and it’s the type of piece we recall reading a lot more of a year and a half ago, before all the news started being about how the federal deficit is keeping Real Americans awake at night and blah blah blah.

But the piece was also, covertly, an actors’ story. For whatever reason, the Times neglected to mention who the three plaintiffs in the suit are—thus missing out on all those extra page views it could have gotten from members of the American Federation of Television and Radio Artists. A link to court documents acquired by the Times revealed that the AFTRA Retirement Fund is one of the three groups battling JPMorgan. (If you’re planning to draw your pension from the Imperial County Employees’ Retirement System of California or the Manhattan and Bronx Surface Transit Operating Authority Pension Plan, you too have a dog in this fight. But seriously, how is it that you’re reading Back Stage? Doesn’t your industry have a trade publication of its own?) The Hollywood Reporter did the messy work, excavating the AFTRA-related facts and citing an unidentified source who claimed that JPMorgan’s Sigma shenanigans had lost the union fund $2 million–$3 million, “only around a 10th of a percent of the plan’s total assets of about $2 billion.”

Shoring up their health and retirement funds was the top priority for AFTRA and the Screen Actors Guild during negotiations this winter on a new TV-theatrical agreement. Now that that deal is done, the unions’ focus has shifted to merger—or the creation of a single union for all performers, or Uncle Joe’s Actors Union, or whatever it is that you want to call it. The pension and health plans have figured prominently in that process too, with questions from members routinely coming back to how merger would impact pension and health. The short answer is that it likely won’t—at least not immediately. If and when the unions are merged, the health and retirement plans for members of the respective organizations will remain just that—respective. The funds are managed separately from the unions, by boards of directors whose members come from both the employee and employer sides. In theory, the two unions could merge and the fund managers could simply refuse to do the same. In reality, that would be unlikely. Merger between SAG and AFTRA would put pressure on the funds to follow suit. But that will be a second conversation, one that almost certainly won’t happen until after the current conversation is finished.

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Comments

While I admire an entity like Backstage informing us they lack the in depth descriptive comments we need on this serious issus.We need to know was this wise and practical ways of investing by AFTRA ? Did J.P. Morgan mishandle any of the 2 - 3 million dollars we lost ? Can we recoup this money ? How the article gets into merger of pensions with SAG was a little out of context, I thought SAG needed to shore up their pension fund because of loss revenue during no contract in 2008-09.Truth known SAG/AFTRA merged with producers at the negotiating table to agree that the members pension/insurance credits be split to remain solvent.

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