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SAG Pension & Health Trustees Still Working on Reciprocity

SAG Pension and Health Logo - H 2012

A complete solution –- merger of the plans –- isn’t even under discussion at this time.

A year and a half after SAG and AFTRA merged, the two union pension and health plans remain far from merger themselves. Indeed, the SAG pension and health plan trustees have not as a group even discussed the possibility of merging with the AFTRA plan, sources told The Hollywood Reporter.

Instead, the issue under discussion remains health plan reciprocity, an approach that would provide limited relief to members who don’t qualify for health coverage but that would not completely resolve the issue – nor address analogous pension-related difficulties that some members face.

Sources emphasized that the trustees of the two plans were working diligently on reciprocity, with subcommittees meeting regularly and exchanging data regarding their respective health plans. However, there have been no public announcements from the plans regarding progress.

The AFTRA plan declined to comment, and it was not immediately possible to reach a spokesperson at the SAG plan.

The SAG-AFTRA convention ends Sunday, but there are no resolutions on the agenda regarding the lack of reciprocity or plan merger.

The crux of the difficulty for members is that although the unions merged – in March 2012 – the P&H plans did not, and nor did the union television contracts. Thus, a SAG-AFTRA member still works under a “SAG” theatrical agreement, a “SAG” television agreement or an “AFTRA” television agreement.

That means that for purposes of qualifying for health insurance or a pension credit, an actor’s income may end up split between SAG and AFTRA contracts, and thus may be attributed in part to the SAG pension and health plan and in part to the AFTRA health and retirement fund (the equivalent of the SAG plan).

With income split in this fashion, a member may fall short of the qualifying thresholds in both plans, whereas without the split, the member’s earnings might have been enough to qualify for health insurance or a pension credit.

Merging the two respective sets of pension and health plans would be the intuitive solution, but the issues involved are complex. On the health side, the plans have different premium structures and different benefits. On the pension side, economic and actuarial differences abound. And on both pension and health sides of the house, the financial reserves and income sources of the plans differ.

Each plan’s trustees have a fiduciary duty solely to their own plan’s participants – notwithstanding the fact that some of those participants are the same people.

Further complicating the issue is the fact that difficulty qualifying for pension and/or health is actually advantageous to those who do qualify. That’s because the employer contributions on behalf of non-qualifiers help pay for benefits to those who do qualify.

But give the Rubik’s cube another twist and a further complication appears: those who qualify during one year may fall short the next. Thus, although their benefits are partially paid for by those who didn’t qualify, they they themselves may fall into that unlucky group the following year.

The union merger was presented in part as a path towards resolving the split earnings problem, but progress has apparently been slow. Meanwhile, an unknown number of members continue to lose health coverage and pension credit due to the problem.

Failure to merge the plans may also have ramifications in the SAG-AFTRA TV/theatrical contract negotiations, which are expected to take place in spring 2014. On the union’s agenda will be merging the SAG and AFTRA television contracts – a difficult task under the best of assumptions, given that the AFTRA contract’s salary minimums are about 3 percent higher than the SAG contract’s.

However, with the plans still separate, there’s another difficulty as well: if the SAG and AFTRA contracts were to be merged, how would one determine whether actors’ income under the merged television contract should count as SAG plan income or as AFTRA plan income? It’s not a question without possible answers, but does add another complication to an already difficult issue.

Work under the theatrical contract presumably generates SAG P&H contribution, because theatrical work has always been solely under SAG jurisdiction. But television work has been split between the two unions for decades, and AFTRA’s share of such work increased dramatically starting in 2009 after SAG failed to ratify a TV/theatrical agreement in 2008 even after AFTRA had.

The two legacy commercials agreements did merge this past spring into a single SAG-AFTRA commercials agreement. Sources have told THR that all P&H contributions for television commercials are now directed to the SAG plan – not surprisingly, since most television commercial work has been under SAG jurisdiction.

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