Thursday, August 10, 2006

Union Milestones

Here's is a bare-bones primer on the benefits milestones that every Animation Guild member should be aware of: 1 year*: vest** in the Individual Account Plan (IAP) 5 years: vest in the Defined Benefit Plan (DBP) 10 years without a break in service***: the DBP formula improves by about 30% 15 years: qualify for retirement health benefits**** 20 years: eligible for Reduced Early Retirement***** 30 years: eligible for Special Reduced Early Retirement or Unreduced Early Retirement****** There are a few other milestones, but those are the main ones that union members should have in mind as they navigate their careers. These milestones also highlight the need to keep track of how many union hours one is working in a given year, to make sure you'll have as many qualified years as possible. *By year we mean a qualified year -- 400 hours worked in a single calendar year counts as a qualified year. For example, someone hired full-time at a union studio in early October, and laid off in late March of the next year, would get credit for two qualified years even though they'd worked less than six total months. Likewise, someone hired Jan. 1, 2005 and working full time through the Feb. 28, 2006 (i.e., 14 months of actual work) would have one qualified year (2005), but would be a little short of a qualified year for 2006. The moral here is to keep track of your hours, and try to get some overtime or have your term extended by a week or two if you're going to fall a little short. Also, remember that qualified years can come from any union studio. Two years at say, Cartoon Network, followed by a year at Film Roman, followed by two years at Disney count the same as five years at any one studio. **Vesting is the granting of credits toward a pension even if separated from the job before retirement. Your pension is locked in once you're vested, and will be waiting for you when you hit retirement age. ***A break in service would be 10 quarters without union work. What this means is that someone who worked 10 union years, had a break in service (e.g., they worked 3 years nonunion), then put in another 10 years at union studios, would have a slightly lower DBP monthly annuity at retirement compared to someone with 20 years with no break in service (assuming they work the same number of hours). ****It's 15 years if at least 3 years are worked after the age of 40; otherwise the threshold for retirement health benefits is 20 years. So, theoretically, one could start in the industry at age 21, work 19 straight years at union shops, and still be a year short of qualifying for retirement health benefits. Or one could start at age 25, work 15 straight years, and be three years shy, while a 15-year worker who started at age 28 would be all set. Yes, it's a little arbitrary, but it used to be 20 years across the board. Also, realize that these are health benefits that kick in at retirement age, not from the time one earns the benefit. Therefore, if one qualifies for this benefit and leaves the industry at age 50, that person would still wait until age 65 for the retirement health benefits to kick in. Addendum: In addition to the yearly requirements, one also needs 20,000 hours to qualify for Retiree Health coverage. *****Reduced Early Retirement will give you 49% of your pension (DBP) started at a retirement at age 55, progressing up to 69% at age 60, and so on. The closer to age 65, the closer the percentage is to 100%. ******Special Reduced Early Retirement requires 30 qualified years and 60,000 credited hours, and will give you 71% of your pension (DBP) at age 55, progressing up to 92.8% at age 59. Unreduced Early Retirement (100% of pension benefit) can be taken at age 60 with 30 years/60,000 hours, or age 61 with 30 years/55,000 hours, or age 62 with 30 years/50,000 credited hours. More detail (much more!) on these and other benefits topics can be found at the Motion Picture Industry Pension and Health Plan website.


willipino said...

very informative stuff, kevin. i've been wondering about this. thanks for the low down.

Anonymous said...

thanks for the info kevin.

i think you forgot to mentioned that you also need 20,000 hours and 15 years without break in service in order to qualify for the retirement health.

Kevin Koch said...

You're right about the 20,000 hours (I've amended the post), but not having a break in service is NOT one of the qualifying provisions for retirement health benefits.

Anonymous said...

Thank you for all this clear information!

Have you had a chance to look in to the pre tax personal medical accounts we spoke about at Siggraph?


Darin Hollings

Anonymous said...

This is probably a stupid question, but I couldn't find the answer on the MPIPHP website: If someone retires at 55, does health care under the active plan continue until retiree coverage starts up at age 65? Or is there a 10-year gap in coverage?

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