Is Your Retirement Plan Account in a Death Spiral?

In April of 2018, upon discovering that some AGMA members were losing money from their retirement plan accounts even in years when the fund showed growth, I began researching the problem for an AGMAzine article that would help AGMA members determine whether or not their account was losing money, and what options they had if it was.

It took months of pestering to get the relevant data, and in March of 2019 I submitted my article. It was withdrawn from the magazine at the last minute as it was felt to be critical of the fund.

In its place, the issue of AGMAzine members just received contains a brief update on the activities of the AGMA Funds Office, penned by Derek Davis, the Executive Director of AGMA’s Retirement Plan and Health Fund. The update is well worth your attention, particularly the statistics on Health Fund Plan A and Health Fund Plan B. Plan A currently covers “about 500 members,” which is only 7% of AGMA’s members. About 200 members continue to have contributions made to Plan B even though it may prove difficult to receive those funds considering the significant restrictions on qualifying expenses. And those of us with contributions received before September 2014 may forfeit up to $500 a year of our balance, even in years where an individual account is active and some expenses reimbursed.

One of the major benchmarks of union democracy is “open publications” willing to print a broad swath of members’ viewpoints, including those critical of its leadership and policies. AGMAzine is a valuable platform for the experiences and perspectives of our members, and debate and frank discussion of the struggles our union is facing is much more likely to result in creative and comprehensive solutions. I leave it to you to draw your own conclusions as to whether the article that follows was appropriately withheld from AGMA’s members, especially those whose retirement savings are at risk.


The author and AGMA do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

As AGMA Retirement Plan contributions are only made by employers, and not all contracts at all signatories result in Retirement Plan contributions, you may feel as though you have no control at all over your account, but there are two important ways in which you can exert some control and one scenario in which it is essential that you do. This article will help explain your options so you can make an informed decision about how the Retirement Plan should contribute to your overall retirement savings strategy.

One of my last day jobs before becoming a full-time performer was as a Mac Genius for an Apple retail store in Woodcliff Lake, New Jersey. The job paid $48,000 a year and I kept the job for six months, from March to September of 2003, earning $24,000. One of the perks of the position was the option to directly invest up to half of my earnings in Apple stock at a 15% discount from the market price. Had I invested all I could, that $12,000 investment would now be worth about $1.25 million dollars.

So, how much did I set aside? ZERO. I was living paycheck to paycheck. I needed every penny of my salary to buy food and make rent. For many of us who are struggling to make ends meet, the thought of saving at all, much less saving for retirement, seems not just aspirational, but unattainable.

That said, to the extent that we have any disposable income and available mental bandwidth, saving for retirement is something that should concern us all.

Generally speaking, retirement savings come from two sources: individual contributions and employer contributions. AGMA’s Retirement Plan only accepts employer contributions, and employers contribute to the fund the amount that they are obligated to contribute under their agreements with AGMA. Thus, the balance you presently have in AGMA’s Retirement Plan is directly tied to the contracts under which you have worked, and the performance of the funds in which the Retirement Plan invests.

This past March, if you had a non-zero balance in the Retirement Plan, you should have received an annual statement. The statement is a snapshot of the value of your account as of August 31, 2018. I encourage you to take a close look at that statement. Investment gains this year were just over 7%. But despite this, a small number of Retirement Plan accounts actually LOST money, and if your account is one of them, you are in a Death Spiral.

What is the Death Spiral?

AGMA’s Retirement Plan is a managed account. The Plan’s trustees decide what types of investments the Fund’s assets should be allocated to (currently about 50% equity and 50% fixed income – a rather conservative investment strategy) and engages an investment manager to make specific decisions about where to invest funds based on those allocations. The Plan also engages an investment advisor who monitors and advises the trustees as to the performance of the investment manager. The fees charged by both the investment manager and the investment advisor are deducted from the investment return, so the 7% investment gain reported in your statement does not reflect the performance of the investments, but rather the amount of investment gain that remains after paying those fees. In addition, each participant in the Plan is charged a flat-rate account maintenance fee to cover additional administrative expenses of the Plan. If the cost of that fee exceeds the investment gains, instead of your savings growing, you are slowly losing money. If you are one of the unfortunate few for whom this is the case this year, or if you are at risk of losing money in an average year, there are steps you can take to remedy the situation.

Who Is at Risk?

If we take 7% as the average annual rate of growth of an investment, then all those whose accounts have a balance such that 7% of the balance is less than the annual maintenance fee are at risk of falling into a Death Spiral in an average year.

First, a bit of good news: At the New York Area meeting this past November, Derek Davis, the Executive Director of the AGMA Retirement and Health Funds, announced that the annual maintenance fee for Retirement Plan accounts has been reduced from $30 to $20. This should be reflected on your annual statement and this most welcome decision will take a number of accounts out of the danger zone.

That said, in order for a Retirement Plan account to consistently accrue value in an average year, the absolute minimum balance you should aim for is approximately $300. In a year of 4% growth, you would lose value with a balance under $500. In a year with only 2% growth, you would need a minimum balance of $1,000 to avoid losing money.

Option One: Get Out

Two years ago, I took a look at my own Retirement Plan statement and was saddened to discover that, despite having worked for a variety of AGMA signatories over a period of more than ten years, my balance stood at $410.60 and I was losing money. Turns out that very few of the contracts I worked included a Retirement Plan contribution.

I decided to take action to protect my savings. Here’s what I did, and what, depending on your circumstances, you may also wish to do.

If it has been at least six months since your last AGMA engagement, and you also have no upcoming AGMA gigs already contracted, you enter a window of opportunity to roll your account balance over to an IRA. Your options include making a tax-deferred rollover to a traditional IRA, or making the appropriate tax payment to rollover to a Roth IRA, or completely withdrawing the funds if you are over age 55 (see

If you are eligible, and choose to go this route, you may request an application form by contacting the AGMA Retirement Plan office. Their phone number is (212) 765-3664 and their email address is

Option Two: Grow Your Savings with the Guest Artist Agreement

For those of us who occasionally accept contracts with non-union companies, there is a little-known and seldom-used way to funnel contributions to the AGMA Retirement Plan: the AGMA Guest Artist Agreement.

Download the form (available at and have a look at Section 3. It is an optional clause of the agreement which states:

“Fourteen percent of the gross compensation shall be forwarded to the AGMA Retirement Plan on the Artist’s behalf.”

This clause unlocks the possibility of asking your non-union employers to contribute to your Retirement Plan. This can, however, be easier said than done. There are a number of hurdles to clear.

Firstly, you or your agent must persuade your employer to accept the Guest Artist Agreement either as your contract or as a rider to an existing contract. Since use of the GAA is optional, it’s possible you may encounter some resistance.

Secondly, since AGMA’s Code of Standards for Agents and Managers discourages agents from charging a commission on retirement benefits, it can be a challenge to persuade them to negotiate for a benefit that they should not commission.

Thirdly, a Retirement Plan contribution increases the cost to the company for your services, which they may not be willing to pay.

One possible strategy to receive a Retirement Plan contribution from an employer unwilling to budge from their original offer is to take the offer in hand, divide it by 1.14, and offer that as the new figure for gross compensation with a Retirement Plan contribution. So, for example, if you are offered a $2,500 performance fee, $2,500 divided by 1.14 is $2,192.98, which you would list on the GAA as total gross compensation. The 14% Retirement Plan contribution would then be $307.02, keeping the company’s cost for your appearance flat, but allowing you to divert some of your income to the Retirement Plan.

Of course, if you need every penny of your fee to survive, this is not a viable option, but if you can afford to save, I encourage you to try.

In the years ahead, I hope AGMA will work to improve the GAA so that it will be of greater benefit to our members and achieve more widespread use. It is a conversation well worth having.

Closing Thoughts: Keeping a Closer Eye on Your Account

Since AGMA members only receive a statement of their Retirement Fund balance once a year, and that statement shows the balance as it stood fully six months before the statements are sent, it’s easy to lose track of the account, especially when we’ve grown accustomed to being able to check most of our accounts online on a daily basis.

I asked Derek Davis what members can do to keep informed about the state of their Retirement Fund accounts, and he had the following recommendations:

  1. Take a moment to complete and return a consent form to receive electronic statements from AGMA Retirement and Health Funds. As of the writing of this article, the consent form has been returned by only 10% of AGMA’s members. Completing the form not only makes it easier and faster for the Funds Office to communicate with you, it also reduces their costs. You can download the form here:
  2. If you do not currently have a beneficiary form on file, or wish to change your beneficiary, you can download the beneficiary designation form here:
  3. Member balances are updated once a year on August 31, based on the Fund’s annual investment performance. However, in between the receipt of annual statements, the Funds Office can keep you up to date on additional employer contributions as they come in. You can call the Funds Office to request this information be disclosed to you. In the future, we can expect an improvement in the way we check on our balances, as the office is “diligently working on an upgrade to our database that will also include a web portal; once it is ready, we will notify everyone how to log in to directly see their own information.”

Saving for retirement is a daunting task, and AGMA’s Retirement Plan is merely one component of a balanced retirement strategy that should include accounts to which you can make your own contributions. I hope that, in the years ahead, more of our signatories will agree to contribute to the Retirement Fund, so that the likelihood of any member’s account falling into a Death Spiral becomes ever smaller, but for now, if you find your savings at risk, I encourage you to take action to protect what is yours.