Yahoo Finance In Now-Stalled Contract Talks With IATSE, AMPTP Proposed More Than Doubling Hours Needed To Qualify For Pension Credits
EXCLUSIVE: Before its contract negotiations with IATSE broke off, the AMPTP proposed making it much more difficult for workers to qualify for pensions by raising the qualification cutoff from the current 400 hours per year to 950. That would preclude hundreds, if not thousands, of IATSE members from earning pension credits each year, and is just one of the many issues on which the union says the two sides “remain far apart.”
Union sources say that management will have to scale back this proposal significantly if a deal is to be made and a strike averted.
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The union, which is now in the process of seeking strike authorization from its members, had come to the bargaining table demanding “sustainable benefits,” but deems as unacceptable a more than doubling of the qualifying hours for pension credits, and is not at all what it had in mind to rescue the ailing plan. Instead, it’s seeking higher contribution levels from employers and higher wages on which those contributions are made.
The pension plan, which is part of the Motion Picture Industry Pension & Health Plans, has for years been inching closer to “critical” condition, which by federal law is defined as anything below 65% as measured by a plan’s assets divided by its liabilities. It’s current funding level now stands at 68.9% – down from 80.8% in 2015. In 2019, the plan’s actuary projected that it will be back up to 80% funded by 2026 and 100% funded by 2032 – but that was before employer contributions to the plan took a major hit because of the pandemic. Year-end fair market value of the plan’s assets was almost $3.8 billion as of December 31, 2018.
On Monday, the Alliance of Motion Picture and Television Producers said that “The IATSE Pension and Health Plan is expected to have a deficit of $400 million over the next three years.” Under its proposals to the union, it said that “the employers will cover the projected deficit of nearly $400 million without imposing premium payments for the no-cost single employee health coverage and without increasing the extremely low cost of dependent health coverage, deductibles, co-pays and co-insurance. Without this infusion of contributions, the reserve level in the Active Health Plan is projected to fall from 17.5 months as of the end of 2020 to 3.1 months as of the end of 2024, and the reserve level in the Retiree Health Plan is projected to fall from 14.4 months as of the end of 2020 to 2.1 months as of the end of 2024. Reserves are critical because they enabled the Directors of the Health Plan to continue coverage for thousands of participants during the pandemic without any additional cost.”
The AMPTP’s statement didn’t mention anything about proposing a sharp increase in the number of hours worked in order to qualify for a pension credit. Asked about that Tuesday, a management source said that “The threshold to qualify for pension is so low casual workers in the industry can qualify for the pension plan. The Producers’ proposal would increase the hours to 950 hours, which works out to 24 weeks – less than 50% of the year – for someone working 40 hours per week, or 16 weeks – 30% of the year – for someone working 60 hours per week. This still recognizes that the nature of the work is freelance work, since you can still qualify for a pension year by working for less than 50% of the year.
“Currently, to get one Qualified Year in the Pension Plan, an individual needs to work only 400 hours. This works out to 10 weeks – 19% of the year – for someone working a 40-hour workweek, or seven weeks – 13% of the year – for someone working a 60-hour workweek.
“It is essential to ensure the pension plan is on sound financial footing. The MPI Pension Plan is only 68.9% funded, and it is important to ensure that pension benefits are being provided to those who are make their living in the industry, and it is available to those who have spent their lives working in the industry and who wish to retire.
“Increasing the hours for a Pension Year would improve the Plan’s funded percentage because it reduces the Plan’s liability. Important to have context, for some time now, there is enough work for those who want to work, therefore earning enough hours to qualify shouldn’t be an issue.”
For IATSE, however, it remains a very big issue.
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