Monday, July 10, 2006

Annual Pension Statement

Most Animation Guild members should have received their 2005 Annual Statement from the Motion Picture Industry Pension & Health Plan. I've called the plan and about 15% of them are still being verified and haven't been mailed out yet. Mine fell into that class, so I called the MPIPHP [(818) or (310) 769-0007, ext. 627] and they got it to me the next day. When you get the Statement, take a good look at it. You should get two pages of explanation and one page with all your unique information on it. Despite the explanatory info, I get questions from people who are unclear on what it all means... At the top of your statement, you'll see a small section labeled PENSION PLAN. This is the summary of your Defined Benefit Plan (DBP). This is the first of the two automatic pensions that all Guild members are entitled to. It has a 5 year vest, so if you haven't vested by the end of 2005 then you'll only see your years here, and no numbers. If you are vested, you'll see a bold face number that indicates your monthly retirement annuity that you've earned so far. Put another way, at normal retirement age this is the sum you'll receive each month until you die. If you compare this section to your 2004 statement, you should see that your "accrued benefit" though last year has gone up retroactively, thanks to recently negotiated contract increases, by 15%. Just your union working for you behind the scenes. The next section is labeled INDIVIDUAL ACCOUNT PLAN. The IAP is the automatic pension plan that vests after a single year of work, so if you're getting the statement you're going to have some money in there. The first line is your previous balance. The second shows any adjustment made for money that should have been reported in prior years (mine's always zero). The third line is the investment income. As we've said before, the IAP is professionally managed, and the managers have generally done well year after year despite a conservative investing strategy. By my calculation they got us a 7.6% return last year. The next line is the "Hourly Contribution" from the employer -- for each hour you work 37.5 cents is deposited into your IAP, along with some extra money on top of that (I'm not sure if the extra here is some of the residual money we receive). The fifth line is the "% of Minimum Wage Scale Contribution" -- currently 5% of the minimum scale for your job classification is also paid by your employer into the IAP. By the last year of our new contract (i.e., 2008-2009), this will be up to 6%. Finally, all those lines are summed up in the total account balance. The next section is the summary of your reported work hours. We always recommend people save their pay stubs, so if the numbers here don't look right you have a way of double checking and confirming. Here are a few questions I got last week in response to the statement: Is the Individual Account Plan the same as my 401(k)? No, they're completely separate and distinct. The IAP is automatic -- you do not have to "opt in" (though you do have to remember to write the MPIPHP at retirement and request it!). There is nothing on this statement related to your 401(k). You should be getting separate, quarterly 401(k) statements if you're participating in the 401(k). Do I have to choose between the Pension Plan and the Individual Account Plan? No, everyone in the Guild is entitled to both. The two plans work differently, and have different vesting periods, but they work in parallel and are automatic. If I leave the industry, can I get at the IAP money? Not until you retire. I just got my annual Social Security statement. Will my Social Security be reduced because I'm also getting a union pension? Not at all. Your Guild pensions are in addition to Social Security (and, for you non-Americans, you're also entitled to both your union pensions and, in most cases, your Social Security benefits, even if you return to your home country).


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