UPDATE, 2:15 p.m. Thursday: Musicians of the Philadelphia Orchestra have voted to accept the offer of a new contract (terms below).
Musicians of the Philadelphia Orchestra are expected Thursday to give their yea or nay on a deeply concessionary four-year contract.
The deal, mediated under the supervision of Stephen Raslavich, chief judge of U.S. Bankruptcy Court for the Eastern District of Pennsylvania, knocks salaries down several rungs, reduces the size of the ensemble and moves musicians from a defined benefit to a defined contribution retirement plan.
The American Federation of Musicians and Employers' Pension Fund, the $1.7 billion national plan that would be jilted by the new labor deal, has pledged to fight for up to $35 million it says it will be owed if the Philadelphia Orchestra Association carries out its stated intention to withdraw from the fund.
Any new labor deal would have to be approved by U.S. Bankruptcy Court as part of the Association’s exit from its chapter 11 case.
Salary cuts in the new contract are so severe that in 2015, at the end of four years of incremental raises, musicians will still not be earning the base minimum amount promised - but reneged on by management - this season.
The deal, the terms of which were obtained by The Inquirer, comes into effect as of Nov. 1:
- A minimum annual salary of $106,000, rising to $111,800 in 2012-13; $117,000 in 2013-14; and with 2014-15 stepped up from $119,600 to $124,800. That last amount is the current base minimum.
- A hiring freeze will cut the official size of the ensemble from the current 105 instrumentalists and two librarians to 95 instrumentalists and two librarians, with the reduction achieved through retirements and attrition.
- Replacement of the current defined benefit pension plans with a 403b plan in which the Association contributes 8 percent of the minimum weekly salary for orchestra members under the age of 40; 9.5 percent for those between 40 and 50; and 10.5 percent for those 50 and older.
- Substitute players, including returning retirees, will be paid at 85 percent of the minimum weekly scale, with a vague exploration of an expanded relationship with the Curtis Institute of Music to create “greater work and learning synergies.”
- The Association has the right to split the orchestra into two parts – each potentially performing in a different venue at the same time – up to eight weeks per year.
The salary minimums are earned by slightly more than half of the orchestra. Others, such as principal and other titled players, earn more – and in some cases much more. Compensation to those over-scale players is being reduced by an “applicable percentage.”
Neither management nor the chairman of the players’ committee Wednesday would comment on the new contract.
The new deal also calls for work-rule changes regarding vacation, what days of the week musicians can be required to work, overtime and rehearsal rules.
Changes in the pension plan are contingent on approval by the Pension Benefit Guarantee Corp., the federal agency that makes up pension obligations employers are unable meet. “In the event the PBGC does not agree to a distress termination, then this agreement may become null and void upon the election of either party and the parties may promptly meet to negotiate a new collective bargaining agreement,” says the memorandum of agreement between the musicians’ union and the Association.
A PBGC spokesman had no immediate comment Wednesday.
The memorandum of understanding also contains language that underscores the contentious nature of this round of labor negotiations, which came in the guise of the Association’s April 16 chapter 11 filing.
“On Oct. 5, 2011, the POA represented to the musicians and to the bankruptcy court that its financial condition is such that it cannot afford a more costly contract than that represented by this MOU. The POA understands that the musicians have relied on this representation in agreeing to…this MOU. In the event that this representation was false, the musicians shall have all rights and remedies provided for at law, including without limitation the right to reopen this MOU.”