Thursday, June 17, 2010

Cash Accumulation

A couple of weeks ago*, one of TAG's board members was chatting with a 25-year animation veteran who was grousing about not being as fully employed as he wanted to be. And worried that he was eating through some of his emergency funds. The board member asked him: "How much do you have in your Individual Account Plan?"

The veteran answered the board member promptly. He said:

"What's the Individual Account Plan?" ...

* I believe I've told this tale before, but what's life without redundancy?

Whereupon the board member told him (while being quietly amazed that the gentleman -- after more than a quarter century of union work -- had no idea what he was talking about.)

The artist had a vague memory of the Motion Picture Industry Plan recently mailing him some sheet or other, and the suggestion was made that he dig the sheet out and look at it.

A little time went by, and the vet phoned the board member in amazement: "The sheet says I've got $130,000. In some account."

I bring this up now because you can see one of these fabled sheets here showing an Individual Account Plan, and also read the accompanying story about how it's good to work at places that pay money into these types of plans:

... I was laid off at a visual effects facility after almost 3 years of service. I wasn’t eligible for any benefits until after my first year of work. After luckily keeping my job for a year I got a 401k retirement account where the employer would contribute matching funds (free money) up to 5% of my salary into the account. Most facilities these days don’t even offer a match. The only problem is that you aren’t fully vested in those matched funds unless you have worked there for 4 years. So when I was laid off I basically lost 75% of the thousands of dollars my employer put into my 401k. ...

Fast forward to another facility this time that was under an Animation Guild contract. I voluntarily leave after 2 years for reasons unrelated to the guild. The guild provides every employee with three retirement plans:

The Individual Account Plan

Nothing comes out of your pocket for this account, it is fully funded by the employer and residuals from films produced by the big 6 studios. After 2 years I have almost $14,000 in the account ....

The Defined Benefit Plan

Again, no money out of my pocket for this one however this one is a little harder to get but it’s icing on the cake. You need to have 5 qualified [pension] years ..

The 401k Plan

This is one you chose to pay into. Money is taken out of each paycheck you get and put into this retirement account and you essentially get to defer paying taxes on this ...

And so on.

Now I understand there are folks out there who will say: "I don't have a freaking job, Hulett! So why are you throwing this stuff in my face?!" And that's fair enough, but I put it out there because life is full of choices, and though you might be flat on your back now, you are most likely not going to be in that horizontal position forever.

At some point or other, you'll find yourself employed.

At some point or other, you could find yourself a valued part of the motion picture industry, skilled in what you do, and able to pick and choose from various job offers that waft your way.

And when that time comes, you'll have the opportunity to pick from column A ... or B ... or C, and depending on the choices you make you could end up well off, better off, or scrambling to make ends meet at age sixty-five when your array of options is narrower and your central goal in life is not to scramble after the next gig, but to be sleeping on a beach in Bermuda.

Only you can't because you made some bad career decisions in your mid-thirties and you don't have a cushion of cash that will allow that wonderful thing to happen. (And I know I bring these items up a lot, but in my experience it's wise to bring them up over and over, because people quite often have short attention spans, and they are valuable enough to repeat.)


Claire said...

I appreciate the info. Thanks for your redundancy!

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