Plans take hit due to sluggish economy
In the latest sign of pressures on showbiz retirement plans, the Directors Guild of America pension plans have disclosed that they lost almost $600 million in value in 2008 and have tightened eligibility requirements this year.While the Board of Trustees recognize these are difficult times for many, in order to keep these plans economically sound, they have decided to increase the requirement for earnings period beginning on or after Jan. 1, 2010,” the DGA-Producer Pension and Health plans said in a recent newsletter. The qualification levels for the DGA basic pension plan rose from $2,700 to $3,000 per credited service month — which are used to calculate benefits as well as determining vesting status. As with the SAG, AFTRA and WGA health and pension plans, the DGA pension plans are separate entities from the DGA and are operated jointly by trustees representing the DGA and the industry. The DGA plans’ newsletter also revealed that the combined basic benefit and supplement benefit plans lost $584.2 million in value during 2008, a 26% decline, and ended the year with a value of $1.695 billion with losses from investments totaling $395.3 million during the year. According to the plans’ website, the basic plan’s investment performance gained 14.3% through the first 10 months of last year and the supplmental plan gained 14.3% during the same period. The newsletter also disclosed that the benefits under the pension plan in 2008 through annuity contracts totaled $118.7 million to 9,842 participants and beneficiaries while administrative expenses amounted to $20.2 million. The losses to the DGA plans mirror hits taken by other health and pension plans, both in and outside of Hollywood, in 2008 due to the market meltdown. The AFTRA plan, which paid $102.4 million in the 2008 fiscal year in benefits to more than 7,000 members, disclosed last March that its plan lost 23.4% of its value and tightened eligibility requirements for vesting, accrual and participation. The Internal Revenue Service recently granted AFTRA’s Retirement Plan five more years to improve the plan’s hobbled finances, increasing the amortization period to 20 years. SAG’s pension plan took a similar hit of 22.7% in 2008, forcing a 43% reduction in benefit accrual rates. The DGA’s basic pension plan disclosed in early 2009 that its assets were down 26.6% last year; IATSE agreed in March to cuts in the health plan by OK’ing a 33% hike in the eligibility threshold during the final year of its three-year pact. In July, the Writers Guild of America West disclosed that member earnings had plunged nearly 18% to $801.4 million for the fiscal year ended March 31; that meant a corresponding decline in employer contributions to the pension and health plans. Currently, employers pay 14% (8.5% to health, 5.5% to pension) for the DGA, 14.5% (8.5% health, 6% pension) for the WGA, 15% (9.25%, 5.75%) for SAG and 15% (9.75%, 5.25%) for AFTRA on top of every dollar of compensation into the pension and health plans.
Want Entertainment News First? Sign up for Variety Alerts and Newsletters!