You can always find great musicians on the streets of Chicago, but not usually members of the Chicago Symphony Orchestra. But now those performers are walking a picket line, striking mostly for something American workers of the last century commonly had: a dependable pension.
That would be a pension that provides an established monthly income—a set amount that continues, often with cost-of-living increases, for as long as the worker lives. Pensions like that used to be one of the key benefits at American companies and one they were proud to offer, back when it was understood that workers who gave their best years to a job deserved a secure retirement.
Then, as the 21st century approached, things changed. While the people at the top of the biggest corporations—and the corporations themselves—made more and more money, it somehow became too much of a burden on those businesses to provide their workers with what is now known as a “defined benefit” plan. Employers began offering a different kind of retirement plan, one that would let them shed the responsibility of providing a guaranteed income for their employees’ golden years. They called it something that sounded similar, but was, in fact, very different: a “defined contribution” plan.
Under this new plan, the employer would put a certain amount of money into a retirement fund for each employee every pay period and be off the hook for anything else. The money would be invested (workers would typically get to choose from a menu of investment possibilities), but whether those investments would grow enough to provide a decent retirement income would no longer be the employer’s concern. The risk that they might not was transferred entirely to the worker.
This “defined contribution” plan is what most private-sector employees have now, if they’re lucky enough to have any employer- funded retirement benefits. If you have a 401(k) at work, it’s what you’ve got.
But musicians at the nation’s half-dozen top orchestras, including the CSO—musicians who excel as much in their field as, say, the prized players on Major League Baseball teams—have been able to hang on to the old arrangement, which they say is a crucial recruiting tool in a highly competitive market for new talent. Until now.
Which brings us to the picket line. In contract negotiations that have dragged on for nearly a year, the Chicago Symphony Orchestra Association, which manages the CSO and employs the musicians, has made it clear that it intends to dump the defined benefit pension.
Here’s how management put it in a statement issued in response to the strike, which began when the previous contract ran out at midnight on March 10: “As has occurred with most Defined Benefit Plans across the country, the financial obligations to continue this plan have become an increasing and significant financial burden for the Association. It must shift and modernize the type of retirement benefit offered going forward if it is to protect the musicians and the long-term future of the Chicago Symphony Orchestra for future generations.”
So management is proposing to “protect the musicians” by shifting the “significant financial burden” of providing retirement income to them.
There are other issues at stake, including salary increases in what, until recent years, was the best-compensated orchestra in the nation. Base salary last season was $159,000. And management has produced a graph that purports to show that, when adjusted for the local cost of living, CSO musicians are still better compensated than their peers, with the possible exception of those in Cleveland.
But the musicians, represented by the Chicago Federation of Musicians, say their pay now lags behind that in San Francisco and Los Angeles, and that, as bassist Stephen Lester put it in an interview last week, “If the trend isn’t reversed, the Chicago Symphony Orchestra will be compensated as a second-tier orchestra. And that’s unthinkable to us.”
Last year, the CSO had a $911,000 operating deficit, and operating expenses of more than $73.6 million, in what management characterized as a successful season, one that “represents a step forward” on the path to a financially sustainable future. Lurking somewhere in the background is a $140 million bond debt, taken on in the 1990s to finance an arguably unnecessary and unsuccessful redevelopment of its Daniel Burnham-designed Orchestra Hall, originally built in 1904.
Still, according to the musicians’ fact sheet, “CSO has maintained a strong balance sheet, with a $300 million endowment, $72 million investment fund, and nearly $300 million in net assets. It can afford to maintain the CSO as America’s leading orchestra if it chooses to do so.”
I called arts consultant Drew McManus, a Chicago-based expert in orchestra management, for his opinion on all this. He told me salaries and other benefits are likely negotiable. The pension issue, on the other hand, in a worst-case scenario, could kill this season (which runs into June) and even extend into the next. The items of contention in past contract negotiations, he said, “pale in comparison.” What about the musicians’ claim that the CSO needs to keep its defined benefit retirement plan in order to hire the best talent and maintain its status as a great orchestra? “Every other major orchestra offers a similar benefit,” he said. “They certainly need to hold on to it to remain competitive.” v