Let us swerve away from the nuts and bolts of animation to focus on survival -- salting bucks away for the future.
Yesterday (Friday) trustees for the Animation Guild's 401(k) Plan -- now 12 1/2 years old -- sat down to review the plan's assets with Plan administrators.
The Plan has $110 million in total assets.
The Plan has 2084 participants - most of them 30-59 years of age.
Four largest holdings: 1) Large Cap Stock Fund (15%)- 2) Fixed Interest Fund (12.4%) - Small Cap Fund (11.9%) - Euro-Pacific Fund (9.9%)
The Plan's tyro expert from 401(k) Advisors explained that:
401(k) Plans work really, really well when they serve as a supplement to a Defined Benefit Plan. (That's a pension plan which pays out a monthly check to its retirees.)
Small problem: DBPs are rapidly being phased out by corporations because they're expensive to fund and maintain.
401(k) Plans don't work very well when they are the only retirement plan someone on the cusp of her/his sunset years possesses.
Bigger problem: Most people in the country have an underfunded 401(k) (the average is $60,000 for people in their fifties) and Social Security.
Many TAG participants have a skosh more than that, and for some it's come in handy. After I finished an enrollment meeting at Fox Animation a few days ago, a storyboard artists told me:
"I've got to get back into the Plan. I had a bunch of money in it, but after I got laid off from Disney I had to tap into it. Thank God the 401(k) Plan was there. It helped me hang onto my house."
The Feds tack on extra taxes to 401(k) assets if you cash them out early -- like before the age of 59 1/2. But sometimes you have to do what you have to do.
Happily, many in the entertainment industry have union pensions to supplement 401(k) Plans. For everybody else, they need to put money away with energy and discipline.