Philadelphia Orchestra’s Price For Withdrawing From Pension Plan Is More Than Twice Initial Figures
PHILADELPHI (CBS) – Now making its way through bankruptcy court, the Philadelphia Orchestra’s management is finding out the price tag for withdrawing from the pension plan for musicians is more than twice the initial figures.
“There’s no question that they can withdraw from the musician’s pension plan, as long as the union agrees to it, or the court does, it’s just a matter of price,” says management lawyer Lawrence McMichael.
Original calculations had the sticker price at $16 million; management then estimated $23 million. Now, lawyer Hank Goldsmith, a representative of the pension fund of the American Federation of Musicians, says the fund should get $35 million. The pension fund is the largest creditor in the Orchestra’s Chapter 11 case.
Management wants to withdraw from the pension program when it exits bankruptcy, and doing so would trigger a payment to the fund. The AFM wants data on the Orchestra’s endowments to determine whether those donations could be used to satisfy the liability claim, but management argues they can’t tap a portion of the remaining $120 million in endowments, because those donations were restricted.
Reported by Steve Tawa, KYW Newsradio