Wednesday, March 15, 2006

Your pension plans

Okay, will everyone who really understands how TAG's pension plans work please raise your hands? Hmmm, that's what I thought -- not too many of you. I know I personally didn't have a clue until I had to help explain them, repeatedly, at new member lunches with Steve. Problem is it's confusing, and it's something most people don't pay attention to because retirement usually seems so far off. So in the next few days I wanted to highlight how our plans work. Notice how I keep using the plural. That's because there are three different plans. Two of them are automatic -- we all get them. Those are the Defined Benefit Plan (DBP) and the Individual Account Plan (IAP). Money flows into both of these pension plans from the first hour you work at a union studio. And to answer some common questions: - no, you don't have to choose. You get both the IAP and the DBP. - yes, even foreign nationals will get the retirement benefits they earn, even if they retire to their home country. - no, nothing is deducted from your paycheck to fund either of these plans. The contributions come from your employer, from residual payments (yes, I said residuals), and money from supplemental markets. The third retirement plan you get through the union is the optional 401(k). Because of the substantial contributions the studios make to the IAP and DBP, the 401(k) does not have an employer match. But it's still a great idea. And all of that is on top of the Social Security benefits you're earning. In the next few days I'll go into a little detail on each of the different pension plans. I know it's not the sexiest topic, but good info to have. Tomorrow . . . the IAP.

4 comments:

Floyd Norman said...

I remember my colleagues grumbling about the union when I started in this business many years ago. But, sixty five years of age arrives a lot faster than you might think.

This old codger is free of financial worries today, and a good part of that is due to our great pension plan.

Kevin Koch said...

Wise words, as always, from Mr. Norman. Of course, some of that grumbling back in the day was somewhat justified, since the pension plans didn't used to be nearly as good as they've become in recent times.

Regardless, glad to know you're in good financial shape!

Suzi Hammon said...

Great to hear the plan explained, but could you go into more detail about how the Defined Benefit Plan is calculated? In other words, how can one figure out how much they might receive once retirement is reached?
Thanks!
Suzi Hammon

Kevin Koch said...

Suzi, did you see my post from the next day (March 16) specifically on the Defined Benefit pension? Check it out, and let us know if you still have questions.

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