AMENDMENT NUMBER FIVE TO THE AMERICAN FEDERATION OF MUSICIANS AND EMPLOYERS’ PENSION PLAN (As Amended and Restated Effective as of January 1, 2002)

Download
Amendment No. 5

WHEREAS, on February 20, 2002, the Board of Trustees (the "Board") of the American Federation of Musicians and Employers’ Pension Fund (the "Fund") adopted the American Federation of Musicians and Employers’ Pension Plan, as amended and restated effective as of January 1, 2002 (the "Plan"); and

WHEREAS, pursuant to Article 9, Section 9.01 of the Plan, the Board reserves the right to amend the Plan at any time; and

WHEREAS, the Board has received advice from the Fund’s independent actuarial consultants that, as a result of the significant and unprecedented investment losses experienced by the Fund during the prior three years, it is likely that the Fund will incur substantial deficits in its funding standard account in the near future, absent the Board taking action to reduce future benefit accruals for participants under the Plan; and

WHEREAS, the Board desires to amend the Plan to provide for a number of benefit modifications in order to avoid future anticipated funding deficiencies projected by the Fund’s actuarial consultants; and

WHEREAS, on September 24, 2003 the Board adopted in principle the benefit modifications described herein;

NOW, THEREFORE, the Plan is hereby amended, effective as of the dates set forth below, as follows:

1. Article I ("Definitions"), Section 1.08 ("Beneficiary") is hereby amended, effective as of January 1, 2004, by adding the following new paragraph at the end thereof:

Notwithstanding anything in this Section to the contrary, the provisions contained above in this Section concerning determination of a Beneficiary in the event there is no living primary or alternate Beneficiary designated by the Participant shall not apply with respect to the pre-retirement death benefit for vested participants described in Section 7.03. Furthermore, notwithstanding anything in this Section to the contrary, on or after January 1, 2004 Participants may designate only one person who has reached the age of majority as primary Beneficiary, and one such person as alternate Beneficiary, of the pre-retirement death benefit for vested participants described in Section 7.03; provided, however, that a minor, trust or estate may not be designated as Beneficiary of such death benefit, and a Participant’s surviving Eligible Spouse shall automatically be the Beneficiary of such death benefit to the extent required by Section 7.03. A person named as an alternate beneficiary for the pre-retirement death benefit for vested participants described in Section 7.03 shall become the Beneficiary only if the person named as primary beneficiary predeceases, or dies simultaneously with, the Participant.

Pension Credit shall be credited in units of years and ¼ years in accordance with the following schedule:

Covered Earnings for Covered Employment Performed During A Calendar Year from1977 through 2003:	Covered Earnings for Covered Employment Performed During Calendar Year 2004 or Later Year:	Pension Credit Earned For That Calendar Year:
$1,500 or more	$3,000 or more	1 year
at least $1,125 but less than $1,500	at least $2,250 but less than $3,000	¾ year
at least $750 but less than $1,125	at least $1,500 but less than $2,250	½ year
at least $375 but less than $750	at least $750 but less than $1,500	¼ year
less than $375	less than $750	no Pension Credit

Notwithstanding the preceding schedule, any Participant with three or more Years of Vesting Service as of December 31, 2003 shall have his or her Pension Credit calculated in accordance with the left column of the preceding schedule for 2004 and later unless such Participant incurs a "Permanent Break-In-Service" under the provisions of Section 4.02.

The Basic Monthly Amount payable to an eligible Participant age 55 or older shall be the sum of the amounts indicated in the following table for each $100 of Contributions payable to the Trust Fund on his or her behalf for Covered Earnings earned during the applicable year(s) that such individual was a Participant, except for those disregarded under the provisions of Section 4.02. For purposes of applying this table, total Contributions applicable to each time period covered by a separate column of the table shall be rounded separately to the nearest $100.

1. Effective for Disability Pension Benefits with respect to which (i) the Participant ceases work with a Contributing Employer on account of Total Disability (as determined in accordance with Section 5.04(b) above) prior to January 1, 2004, and (ii) the Plan Administrator receives an initial application (on the form provided by the Plan Administrator for such purpose) prior to March 1, 2004 and the Participant completes the application form(s) and takes all of the steps necessary for commencement of his or her Disability Pension Benefit within 90 days from the date the Plan Administrator receives the initial application, the monthly amount of an eligible Participant’s Disability Pension Benefit shall equal the Regular Pension Benefit monthly amount such Participant would receive if he or she were age 65 as of the effective date of the Participant’s Disability Pension Benefit (as determined in accordance with Section 5.04(c) above).
   
   
2. Effective for Disability Pension Benefits with respect to which (i) the Participant ceases work with a Contributing Employer on account of Total Disability (as determined in accordance with Section 5.04(b) above) on or after January 1, 2004, or (ii) the Participant ceases work with a Contributing Employer on account of Total Disability (as determined in accordance with Section 5.04(b) above) prior to January 1, 2004 and the Plan Administrator receives an initial application (on the form provided by the Plan Administrator for such purpose) on or after March 1, 2004, or the Plan Administrator receives an initial application (on the form provided by the Plan Administrator for such purpose) prior to March 1, 2004 but the Participant does not complete the application form(s) or otherwise take all of the steps necessary for commencement of his or her Disability Pension Benefit within 90 days from the date the Plan Administrator receives the initial application, the monthly amount of an eligible Participant’s Disability Pension Benefit shall equal the Actuarial Equivalent (determined based on the Participant’s actual age as of the effective date of his or her Disability Pension Benefit (as determined in accordance with Section 5.04(c) above)) of the Regular Pension Benefit monthly amount such Participant would have received if he or she were age 65 as of the effective date of the Participant’s Disability Pension Benefit (as determined in accordance with Section 5.04(c) above).

In no event shall the lump sum disability award described in this Section be payable in the event the written application for such award is received by the Plan Administrator on or after January 1, 2004.

Section 5.07 REDETERMINATION OF PENSION BENEFITS. If a Participant commenced receiving payment of pension benefits under the Plan, and subsequently returns to Covered Employment and earns additional Covered Earnings, the pension benefits payable will be redetermined subject to the provisions of subsections (a), (b), (c) and (d) of this Section. For purposes of this Section, the term "Pensioner" shall also refer to a Participant who previously received the lump-sum payment of a pension benefit under the Plan and subsequently returns to Covered Employment and earns additional Covered Earnings.

1. Redeterminations With Respect to Contributions Based on Covered Employment Prior to January 1, 1996. If a Pensioner returns to Covered Employment and has Covered Earnings after his or her Annuity Starting Date, the provisions of this subsection (a) shall apply with respect to Contributions based on any such Earnings earned prior to 1996. The amount of benefits redetermined pursuant to this subsection (a) are subject to adjustment where the pension is being paid in the form of a Joint and Survivor Annuity. The redetermination procedures set forth in this subsection (a) shall apply only to the Contributions based on Earnings earned by a Pensioner after his or her Annuity Starting Date and shall not apply to any Contributions taken into consideration at the time of the Pensioner’s Annuity Starting Date. Contributions shall be rounded to the nearest $100. The amount of any additional pension benefit payable based on Contributions credited after a Pensioner’s Annuity Starting Date, as determined in accordance with this subsection, shall be added to the Pensioner’s monthly pension benefit and commence to be distributed on the July 1 following the calendar year it was accrued. The Pensioner shall be entitled to an additional Basic Monthly Amount based on (i) the Pensioner’s attained age as of July 1 of the year following the calendar year in which the Covered Earnings were earned (except in the case of a Pensioner receiving payment of a Disability Pension Benefit payable under the provisions of Section 5.05(a) with respect to which redeterminations shall at all times be made using the dollar rate applicable to age 65), and (ii) the monthly pension factors indicated in the following table:
   
   

   ATTAINED AGE	MONTHLY PENSION SUPPLEMENT PER $100 OF CONTRIBUTIONS:
   55	$.83
   56	.86
   57	.87
   58	.89
   59	.90
   60	.92
   61	.95
   62	.97
   63	.99
   64	1.02
   65 or over	the Basic Monthly Amount dollar rate set forth in Section 5.03(a) for a Participant age 65 or over for the calendar year in which the Covered Earnings were earned

   
   For years preceding attainment of Normal Retirement Age by a Pensioner receiving payment of a Regular Pension Benefit, the additional benefit shall not be less than the amount determined using the applicable Basic Monthly Amount dollar rate set forth in Section 5.03(a) based on the Pensioner’s attained age as of July 1 of the year following the calendar year in which the Covered Earnings were earned, reduced by the Actuarial Equivalent of the pension benefits paid to the Pensioner during that calendar year.
   
   
2. Reretirement and Redetermination of Regular Pension Benefits and Disability Pension Benefits Payable Under Section 5.05(a) With Respect to Contributions Based on Covered Employment On or After January 1, 1996. Notwithstanding anything contained herein to the contrary, if a Pensioner returns to Covered Employment and has Covered Earnings in any calendar year after his or her initial Annuity Starting Date, which would otherwise have entitled such Pensioner to a redetermined benefit under the provisions of subsection (a) of this Section, the provisions of this subsection (b) shall apply with respect to Contributions based on Earnings earned on and after January 1, 1996.
   
   If a Pensioner initially commences receiving payment of a Regular Pension Benefit on or after attaining Normal Retirement Age, and thereafter returns to Covered Employment and earns additional Covered Earnings, the additional benefits that may become payable to such a Pensioner shall be calculated and distributed in accordance with the provisions of subsection (a) of this Section; provided, however, that the amount of any additional benefit that may become payable to such a Pensioner on or after January 1, 2004 shall be calculated in accordance with the provisions of subsection (d) of this Section. The form of payment of the additional benefits shall be the same as that of the Pensioner’s initial Regular Pension Benefit; provided, however, that if the initial Regular Pension Benefit is being paid in the form set forth in Section 8.01(b), the balance of the guaranteed amount of the initial Regular Pension Benefit which is payable to the Participant’s Beneficiary upon the Participant’s death, if any, shall be reduced by the additional benefits paid to the Participant, and there shall not be a new guaranteed amount payable with respect to the additional benefits.
   
   The following provisions shall apply with respect to any additional pension benefits that may become payable to a Pensioner who initially retires and commences receiving payment of a Regular Pension Benefit or Disability Pension Benefit payable under the provisions of Section 5.05(a) prior to attaining Normal Retirement Age, and then returns to Covered Employment and earns additional Covered Earnings (for purposes of this subsection (b) only, referred to as an "early retirement Pensioner").
   
   
   1. Any additional pension benefit that may become payable to an early retirement Pensioner with respect to Contributions based on Earnings earned by such early retirement Pensioner after his or her initial Annuity Starting Date prior to his or her attainment of Normal Retirement Age shall commence to be distributed to such early retirement Pensioner on the first day of the month following his or her attainment of Normal Retirement Age. Such day shall be deemed the Annuity Starting Date with respect to the additional monthly benefit payable to the early retirement Pensioner with respect to such Contributions (for purposes of this Section only, referred to as the "later Annuity Starting Date"), and the commencement of this additional pension benefit may not be deferred beyond the later Annuity Starting Date. If the additional monthly pension benefit payable commencing on the later Annuity Starting Date is paid in the form set forth in Section 8.01(b), the guaranteed amount of such additional benefit shall equal 100 times the monthly benefit amount determined under paragraph (2) of this subsection (b) based on Contributions attributable to Covered Earnings earned prior to January 1, 2004.
      
      
   2. Subject to adjustment where the early retirement Pensioner’s initial pension benefit is being paid in the form of a Joint and Survivor Annuity or where the additional pension benefit is to be paid in the form of a Joint and Survivor Annuity, the amount of the additional monthly pension benefit that will become payable to an early retirement Pensioner as of his or her later Annuity Starting Date shall be the greater of the following two amounts:
      
      
      1. (i) the total monthly benefit computed using the Basic Monthly Amount dollar rate(s) set forth in Section 5.03(a) applicable to age 65 and all Contributions credited on behalf of the early retirement Pensioner for all periods of time up to the end of the month during which he or she attains Normal Retirement Age (including Contributions which were used in calculating his or her original pension benefit), less the monthly Actuarial Equivalent value of the pension benefits actually paid to such early retirement Pensioner from his or her initial Annuity Starting Date up to the end of the month during which he or she attains Normal Retirement Age, minus (ii) the amount of the monthly pension benefit that was payable to the early retirement Pensioner immediately prior to his or her later Annuity Starting Date; and
         
         
      2. the sum of the additional monthly benefits that would have become payable to the early retirement Pensioner annually with respect to Contributions based on Covered Earnings earned from the later of January 1, 1996 and his or her initial Annuity Starting Date up to the end of the month during which he or she attains Normal Retirement Age if those benefits were calculated in accordance with the provisions of subsection (a) of this Section, without regard to the last paragraph of subsection (a).
      
      
      
   3. Additional benefits payable to an early retirement Pensioner with respect to Contributions based on Covered Employment after attaining Normal Retirement Age shall be calculated and distributed in accordance with the provisions of subsection (a) of this Section; provided, however, that the amount of any additional benefit that may become payable to such a Pensioner on or after January 1, 2004 shall be calculated in accordance with the provisions of subsection (d) of this Section. The form of payment shall be the same as that elected by the early retirement Pensioner as of his or her later Annuity Starting Date determined under this subsection (b), if any, in accordance with the applicable provisions of Article 8 of the Plan; provided, however, that if the original pension benefit and/or the benefit commencing on the later Annuity Starting Date are being paid in the form set forth in Section 8.01(b), the balance of the guaranteed amount of such benefits which is payable to the Participant’s Beneficiary upon the Participant’s death, if any, shall be reduced by any additional benefits paid to the Participant with respect to Covered Employment performed after attainment of Normal Retirement Age, and there shall not be a new guaranteed amount payable with respect to any additional benefit paid in the form set forth in Section 8.01(b) based on Covered Employment performed after attainment of Normal Retirement Age.
      
      
   4. If an early retirement Pensioner does not have a later Annuity Starting Date because he or she first returned to Covered Employment and earned additional Covered Earnings after attaining Normal Retirement Age, the first date that additional benefits become payable under the provisions of subsection (a) of this Section shall be the Annuity Starting Date of such additional pension benefit; provided, however, that the amount of any additional benefit that may become payable to such a Pensioner on or after January 1, 2004 shall be calculated in accordance with the provisions of subsection (d) of this Section. The form of payment elected at that time shall also apply to all subsequent additional pension benefits that become payable to him or her thereafter, if any; provided, however, that if the original pension benefit is being paid in the form set forth in Section 8.01(b), the balance of the guaranteed amount of such benefit which is payable to the Participant’s Beneficiary upon the Participant’s death, if any, shall be reduced by any additional benefits paid to the Participant with respect to Covered Employment performed after attainment of Normal Retirement Age, and there shall not be a new guaranteed amount payable with respect to any additional benefit paid in the form set forth in Section 8.01(b) based on Covered Employment performed after attainment of Normal Retirement Age.
      
      
   5. A Participant or former Participant who retires prior to attaining Normal Retirement Age and receives a lump-sum payment of his or her pension benefit in accordance with the provisions of Section 8.05 of the Plan, and then returns to Covered Employment and earns additional Covered Earnings, shall be considered an early retirement Pensioner for purposes of this subsection (b); provided, however, that with respect to such an early retirement Pensioner, the amounts used in the calculation of the additional pension benefit payable as of the later Annuity Starting Date under paragraph (2)(A) of this subsection (b), which are based on the monthly value of benefits actually paid to an early retirement Pensioner, shall be computed as the monthly Actuarial Equivalent value of the lump-sum payment received by the early retirement Pensioner as of his or her initial Annuity Starting Date (plus subsequent lump-sum payments received by the early retirement Pensioner with respect to additional benefits based on Covered Earnings earned prior to 1996, calculated in accordance with subsection (a) of this Section, if any).
      
      
   6. In the event that an early retirement Pensioner who has earned an additional monthly pension benefit described in paragraph (2) of this subsection (b) dies prior to his or her later Annuity Starting Date, the provisions concerning the amount and distribution of pre-retirement death benefits set forth in Sections 7.02 and 7.03 shall apply with respect to distribution of the death benefit attributable to Contributions credited on behalf of the early retirement Pensioner based on Covered Employment performed after the Pensioner’s initial Annuity Starting Date; provided, however, that the $2,000/$4,000 minimum described in Section 7.02 shall not apply.
   
   
   
3. Reretirement and Redetermination of Disability Pension Benefits Payable Under Section 5.05(b). The following provisions shall apply with respect to any additional pension benefits that may become payable to a Pensioner who initially retires and commences receiving payment of a Disability Pension Benefit payable under the provisions of Section 5.05(b) prior to attaining Normal Retirment Age, and then returns to Covered Employment and earns additional Covered Earnings (for purposes of this subsection (c) only, referred to as an "early disability Pensioner").
   
   
   1. The provisions concerning the timing of the payment of an additional pension benefit contained in subsection (b)(1) above shall apply; provided, however, that there shall be no guaranteed amount with respect to the additional benefit payable to an early disability Pensioner.
      
      
   2. Subject to adjustment where the additional pension benefit is to be paid in the form of a Joint and Survivor Annuity, the amount of the additional monthly pension benefit that will become payable to an early disability Pensioner as of his or her later Annuity Starting Date shall be the monthly benefit computed using the Basic Monthly Amount dollar rate set forth in Section 5.03(a) applicable to age 65 as of the later Annuity Starting Date and the sum of all Contributions earned from the initial Annuity Starting Date through the end of the month during which the Pensioner attains Normal Retirement Age during a calendar year in which at least $50 of Contributions attributable to additional Covered Earnings were earned.
      
      
   3. Additional benefits payable to an early disability Pensioner with respect to Contributions based on Covered Employment after attaining Normal Retirement Age shall be calculated in accordance with the provisions of subsection (d) of this Section. The provisions concerning the form of payment of these additional benefits contained in subsection (b)(3) shall apply.
      
      
   4. The provisions concerning the form and timing of additional benefits based on additional Earnings first earned after Normal Retirement Age contained in subsection (b)(4) shall apply. The provisions concerning death benefits payable in the event of the death of a Pensioner prior to his or her later Annuity Starting Date contained in subsection (b)(6) shall apply.
   
   
   
4. Redetermination With Respect to Contributions Based on Covered Earnings Earned On or After January 1, 2004. If a Pensioner earns Covered Earnings on or after January 1, 2004 after reaching Normal Retirement Age, subject to adjustment where the Pensioner’s pension benefit is being paid in the form of a Joint and Survivor Annuity and where the additional pension benefit is to paid in the form of a Joint and Survivor Annuity, the amount of the additional monthly benefit that may become payable to such a Pensioner with respect to those Covered Earnings earned during calendar year 2004 or later shall be (i) the amount of the additional monthly benefit that would be payable under the provisions of subsection (a) with respect to Covered Earnings earned during that calendar year, minus (ii) the monthly Actuarial Equivalent value of the benefits actually paid to such Pensioner during that same calendar year (i.e., the calendar year in which the additional Covered Earnings were earned) based on Covered Earnings earned on or after January 1, 2004.

Subject to the provisions of Section 8.05, and unless the surviving Eligible Spouse files a written election on the form(s) provided by the Plan Administrator for such purpose to receive distribution in a lump sum, this death benefit shall be paid to the Participant’s Eligible Spouse as follows: (i) in the event of the death of a Participant prior to January 1, 2004, in the form of a Survivor’s Pension as provided in Section 7.02; or (ii) in the event of the death of a Participant on or after January 1, 2004, in the form provided in Section 7.03. If the Participant’s surviving Eligible Spouse does not receive distribution in a lump sum and dies prior to the commencement of payment of the death benefit, the death benefit shall be forfeited.

(d) In no event shall the death benefit described in this Section be payable as a result of the death of a Participant on or after January 1, 2004.

Section 7.03 PRE-RETIREMENT DEATH BENEFIT FOR VESTED PARTICIPANTS WITH DATE OF DEATH ON OR AFTER JANUARY 1, 2004.

1. Eligibility for Benefit. A Participant’s Beneficiary shall be eligible to receive the death benefit described in this Section if the Participant dies on or after January 1, 2004 and after he or she is vested in a Regular Pension Benefit in accordance with Section 4.01, but prior to his or her Annuity Starting Date for a Regular Pension Benefit or a Disability Pension Benefit, subject to the provisions of Section 7.05.
   
   
2. Form and Amount of Benefit. Effective for Participants who die on or after January 1, 2004, the death benefit payable to the Participant’s Beneficiary shall, subject to the provisions of Section 8.05, be an annuity for the life of the Beneficiary which is the Actuarial Equivalent of a life annuity with monthly payments equal to those the Beneficiary would have received had the Participant commenced to receive a Regular Pension Benefit in the form of a Joint and Survivor Annuity with the Beneficiary as the Joint Annuitant on the later of (i) the first day of the month following the Participant’s date of death, and (ii) the first day of the month following the date the Participant would have attained his or her earliest retirement age under the Plan had the Participant lived until such date, and died the day after commencing a Joint and Survivor Annuity. If the Participant’s Beneficiary dies prior to the commencement of payment of the death benefit, or if, at the time of death, the Participant has no surviving Eligible Spouse, or other surviving Beneficiary duly designated by the Participant in accordance with the terms of the Plan, the death benefit shall be forfeited.
   
   
3. Commencement of Benefit to Beneficiaries Other Than Eligible Spouses. Subject to the provisions of Section 7.05, payment to a Beneficiary who is not an Eligible Spouse shall commence as soon as administratively practicable following the death of the Participant. Notwithstanding anything contained herein to the contrary, effective for any Participant who has a written beneficiary designation on file with the Plan Administrator as of December 31, 2003 that names more than one person in the class of primary Beneficiary or in the class of alternate Beneficiary, or that names a minor, trust or estate as Beneficiary, the death benefit shall be paid to the Participant’s Beneficiary in the form of a lump sum in the event the Participant is unmarried at the time of his or her death and the Participant dies at any time between January 1, 2004 and 30 days after the Plan Administrator sends to the Participant a new written beneficiary designation form to complete and file with the Plan Administrator. Upon the expiration of such 30-day period, any beneficiary designation form naming more than one person in the class of primary or alternate Beneficiary, or designating a minor, trust or estate as Beneficiary, shall be invalid.
   
   
4. Commencement of Benefit to Eligible Spouses. If the Participant has an Eligible Spouse at the time of death, the Participant’s Eligible Spouse shall be the Beneficiary of the death benefit described in this Section. If the Participant dies prior to attaining Normal Retirement Age, distribution of the death benefit to the Participant’s Eligible Spouse shall, subject to the provisions of Section 7.05, commence on the first day of the month immediately following the date the Participant would have attained Normal Retirement Age unless the surviving Eligible Spouse files a written election, on the form(s) provided by the Plan Administrator for such purpose, to commence distribution earlier.

(C) with respect to a Disability Pension Benefit payable under the provisions of Section 5.05(b) above, there shall be no guaranteed pension benefit amount.

Subsections (b) and (c) of this Section shall not apply with respect to a Disability Pension Benefit payable under the provisions of Section 5.05(b).

Subject to the provisions of subsection (a) of this Section, if, within 60 months of the Annuity Starting Date of a Pensioner’s Joint and Survivor Annuity (or, if earlier, the effective date (as determined in accordance with Section 5.04(c)) of the Pensioner’s Disability Pension Benefit distributed as a Joint and Survivor Annuity, if applicable), the Pensioner and his or her Joint Annuitant are both deceased, the Beneficiary designated by the Pensioner to receive the death benefit described in this subsection (c) shall receive a monthly benefit equal to the monthly benefit that the Pensioner would have received based on Contributions attributable to Covered Earnings earned prior to January 1, 2004 had he or she elected the form described in Section 8.01(b) (without any guaranteed payments described in paragraphs (1) and (2) of Section 8.01(b)) commencing on the Annuity Starting Date of the Pensioner’s Joint and Survivor Annuity (or, if earlier, the effective date (as determined in accordance with Section 5.04(c)) of the Pensioner’s Disability Pension Benefit distributed as a Joint and Survivor Annuity, if applicable), as adjusted by any interim percentage increases in benefits to Pensioners and Beneficiaries described in Section 5.09.

(e) Disability Pension Benefit

In order to determine the Disability Pension Benefit under Section 5.05(b) of the Plan, the following factors shall apply to the Regular Pension Benefit monthly amount a Participant would receive if he or she were age 65 based upon his or her attained age as of the effective date of the Participant’s Disability Pension Benefit (as determined in accordance with Section 5.04(c) of the Plan: