SAG/AFTRA Merger Details Revealed

SAG may seek to merge the unions prior to the pension and health plans; completion in 2011 may be the SAG goal.

SAG sources have dropped a couple of interesting details regarding their thinking on merger with AFTRA. One relates to pension and health; the other to timing.

As an initial matter, it should be emphasized that these are unofficial remarks. SAG hasn’t taken an official position on the two issues, and AFTRA’s thinking is unknown.

On pension and health, SAG 1st national VP Ned Vaughn, writing in the SAG Hollywood Division’s latest “Call Sheet” newsletter, says that merger “would give us an unparalleled opportunity to urge pension and health trustees to form a single plan.”

This is the first time a SAG official has publicly indicated that the union may wish to defer merging the P&H plans until after the unions themselves merge. The plans are run by separate boards of trustees composed of equal numbers of management and union representatives.

Merging the plans presents difficult legal, financial and actuarial questions, even in the best of times – and these are scarcely the best of times for the plans.

All entertainment union pension and health plans have been under financial stress lately, which led SAG and AFTRA to seek and obtain an unusually large 1.5% increase in employer contributions to the plans. That stress is due to weakness in investment returns on pension plan assets, soaring healthcare costs, and the uncertain fate of the healthcare reform law passed earlier this year.

Controversy over merger of the plans helped derail a 2004 attempt to merge the two unions.

In addition, since management is generally thought to benefit from the divided unions, management trustees might be less willing to agree on merging the plans than the union representatives.

Merging the unions first would sidestep all of these issues, or at least defer them.

On a related matter, SAG sources have told THR that they hope that merger will be accomplished by the end of 2011. This is an ambitious goal, in light of the many issues involved and the SAG calendar.

Among those issues are membership criteria (SAG has conditions that must be met, whereas AFTRA requires only payment of an initiation fee), reconciling contractual differences, equalizing minimums (AFTRA’s are 3.5% higher than SAG’s), governance structure (AFTRA’s board is elected in a very different fashion than SAG’s, and the regional structure of the two unions differ markedly as well), and securing membership approval and employer agreement to recognize the merged union.

Merging the boards and staffs of the two unions would also be complex. Then there’s also the touchy issue of what name to adopt for the combined union.

The SAG calendar plays into the effort as well, since SAG developments are often put on pause during the July to September election season. However, with the guild’s Unite for Strength party dominant and the opposition MembershipFirst party decimated, there may be less hesitation this time around on continuing substantive business.

A joint forum of the two unions’ presidents, Ken Howard and Roberta Reardon, has been meeting to begin the merger process.

SAG and the AMPTP declined to comment, and an AFTRA spokesman was unavailable.