Monday, May 17, 2010

Fifteen Years of TAG Pension Benefits

Because we've been answering questions about the IA TAG Pensions (and remember we've got three of them: the Defined Benefit Plan, the Individual Account Plan, and the TAG 401(k) Plan*), and because the question: "What do I get after fifteen years?" has been asked, let's do a little mind exercise.

What might you expect in Animation Guild pension bennies after, say, fifteen years? ...

(We're assuming here that you A) work fifty weeks a year for fifteen years, and B) the current structures and percentages of the DFP, the IAP and the 401(k) Plan remain in place.)

In the Defined Benefit Plan, working 2000 credited hours for ten years at the benefit rate of $ 0.0295 per hour, and then working an additional five years at the increased accrual rate of $0.0393 with the same number of credited hours (2000), you would end the decade and a half with a monthly annuity of $983.00 .

In the Individual Account Plan, it gets a tad trickier, because we have to make assumptions that may be low or could be high. But for our mind exercise, we assume the following: A $1600/week minimum contract rate, a 5% annual investment return (which leans conservative), and a 2% annual minimum wage increase (in line with most current bump-ups). We further assume that the employer contribution into the IAP of 6% of an employee's minimum rate (plus 30.4 cents for each hour worked) will be the same over the next decade and a half.

So. Plugging in all those percentages and numbers, and doing the calculations, we start with $5,420 the first year, and end with $136,199.19 at the end of year fifteen.

Not too shabby. (And please note that these two plans are automatic ... and paid for by contributions from the employer.)

Now, the third leg of the TAG Pension Suite, the optional TAG 401(k) Plan, is a no-match Plan (similar to 30% of the 401(k) Plans in the U.S. of A.), funded by employees' deducted, pre-tax wages.

For the 401(k) calculations, we assume a $16,500 annual employee contribution and a 5% rate of return, compounded. Plugging in those numbers, we get: $16,500 at the end of the first year, and $353,009.00 at the end of the fifteenth. ($247,000 of which would have been put in by the employee.)

Your grand total of pension benefits after fifteen years of creative labor? A $983 monthly annuity and $489,208.19 lump-sum accumulation.

Could be worse.

* The Motion Picture Industry Defined Benefit Plan provides you with a monthly check on retirement; the Motion Picture Industry Individual Account Plan gives you a lump sum accumulation (both paid by the employer); the TAG 401(k) Plan gives you a lump-sum accumulation from your deducted wages.

Anmation Guild TAG 401(k) Enrollment Meetings

Disney TVA -- Sonora Building -- Tues., May 18th, 2 p.m., Rm 1173

Disney Toons -- Sonora Building -- Tues. May 18th, 3 p.m. Rm. 2025

Disney Feature -- Southside Building -- Thurs. May 20th, 10 a.m., Rm 1300

Nickelodeon -- Wed. May 26th, 1 p.m., Main Conf. Rm.

Fox TV Animation -- Thurs. May 27th, 2 p.m., Main Conf. Rm.


Anonymous said...

After 2 years in the guild I have 13000 dollars in my individual account plan alone, and I didn't put a dime in there. Thank you.

Steve Hulett said...


Anonymous said...

Steve, I know I can check out my 401(k) balance online at the Mass Mutual website, but is there a similar online place to see the Defined Benefit and Individual Account balances?

Anonymous said...

Call them at (888)369-2007 ext. 627. You should have gotten your pension and IAP statement in the mail, if not check your address on file.

Even though it's pretty easy to just call and get that info, it would be nice to get some statement each month that shows how much is in there.

I can tell you how bitter I was paying initiation fees and dues until a year later when I got a statement in the mail saying how there was 6000 dollars waiting for me.

The guild would be in a better opinion with more people if they could directly see what the return is on joining the guild imho.

Steve Hulett said...

We do try to let people know.

A thousand years ago, I too paid the initiation fee (and of course the dues.) At the time, I just accepted it as the price for working in the story department at Disney.

But I understand how people get irritated about coughing up money to a labor organization.

Steve Hulett said...

To answer another comment:

The MPIPHP might eventually have an on-line account site for participants to view, but they don't as of now.

You can go to the site and see your accumulated hours, but not your payouts. (They calculate those once each year.)

Anonymous said...

I'm 38 and I have about 8 years in the union, which puts me at a little over half way to the 15-year mark. Based on the statement I got from the MPIPHP statement I got earlier this month, my Defined Benefit Plan is right on track for the numbers that Steve mentions above.

My IAP took a hit from 2008, as did everyone else. So, I'm not at the halfway mark there. But it's $33,000 of money that I didn't have working in non-union shops. Also, due to compounding interest, the money will grow faster in the later years as opposed to the beginning or middle. So I still might be able hit six figures in the IAP.

My 401(k) is only about a third of what Steve mentioned above after being in the union for 15 years. So I'm a little behind there. That's totally on me for not maxing out every year, but I made sure I put something in it when ever I work at a union shop. Plus, I've put money away elsewhere, so I guess if that money was in the 401(k) instead, I'd be on track there too.

On top of these financial benefits, if I can make it to 15 years, I get lifetime health insurance when I retire.

So, will I get those numbers that Steve mentions above? Maybe less, maybe more. But I'm sure that if I didn't have these benefits, I would have to work much harder to accumulate the same amount.

On a side note, I had a 7 month hiatus between union animation gigs. In that gap, the only job I could find paid only half of what I'm making now. There were no paid sick days, no paid holidays, no paid vacation, no 401(k) plan and no health benefits. (Maybe I should have looked harder for a better job? haha) Thankfully I had banked hours in the union so it bridged my health insurance until I got back to a union shop.

A lot of people here rag on the union, which is their right and opinion. But I'm glad to have access to these benefits. As Steve mentioned above, "Could be worse." :-)

Anonymous said...

Steve - what percentage of TAG members are over 55 and working 300+ hours a year? and how many? that information would be helpful as well.

Steve Hulett said...

Steve - what percentage of TAG members are over 55 and working 300+ hours a year? and how many? that information would be helpful as well.

Anecdotally, I can tell you a lot of animation people hit a wall somewhere in their fifties.

Around that time many artists' network of support -- usually people five to ten years older who have helped to push gigs their way -- retire, and the work just kind of dries up.

I will try and find some stats and post them here.

Anonymous said...

Steve: What happens if someone gets sick or loses their job before 15 years? do you still get your benefits or do they go to someone more fortunate?


Steve Hulett said...

If you're vested (and that's one year for the Individual Account Plan, five years for the Defined Benefit Plan) you will get money when you reach retirement age or qualify for a disability benefit.

You need ten qualified years and a minimum of 10,000 hours to qualify for a disability pension.

Floyd Norman said...

Wow! I never thought about it that way, but it seems it's true. Your career ends when all your friends either die or retire.

My advice. Make lot's of young friends.

Anonymous said...

So thast's the amount with 15 years - is there a difference if you have 20 years? 30 years?

Kevin Koch said...

Yes, there's a difference with any number of years you choose. With the above numbers (2000 hours a year, maxing out the 401(k) at current limits), after 20 years one would have a Defined Benefit monthly annuity of $1376, an Individual Account total of just over $200,000, and a 401(k) of around $565,000.

After 30 years, it would be a monthly annuity of $2,162, an IAP of slightly over $400,000, and a 401(k) with 1.144 million.

The more hours and years you work, the more you have coming at retirement.

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