SAG-AFTRA Joint Statement

For IMMEDIATE Release:

Contact: Ilyanne Morden Kichaven 323-549-6701

Jayne Wallace 212-863-4260

SAG-AFTRA JOINT STATEMENT:

Gilbert and Connolly:

“Employer resistance to consolidation is no surprise.”

Health and pension report states “no critical barriers” to combining plans

Los Angeles – Melissa Gilbert and John Connolly, presidents of SAG and AFTRA, today released the following statement:

Today’s press accounts regarding the combination of SAG’s and AFTRA’s health plans are a clear indication of what we have known all along: there will be employer resistance to consolidation because consolidation strengthens our members. Uniting SAG and AFTRA will give actors, broadcasters and recording artists greater power at the bargaining table. Combining our health and pension plans will strengthen benefits for members of both unions.

A management perspective on the benefits issue – as expressed by a studio executive – is simply wrong. Contrary to what management is saying, the report from the benefits experts at Mercer Consulting unequivocally states, as we have said all along, that there are ‘no critical barriers’ to combining the health and pension plans. In fact, the study suggests that combining the plans could generate savings to be applied toward improving benefits.

The findings of the Mercer report further demonstrate the necessity and feasibility of combining the plans, and if members approve consolidation, we intend to pursue this course of action – with or without the support of management. It is in our members’ best interest.

Our advice to members: consider the source. We know we can’t rely on employers to look out for our best interests. The consolidation issue is no exception. Unfortunately, opponents of the consolidation plan have adopted the employer’s perspective as their own. We believe we must not allow employers to decide our future. Actors, broadcasters and recording artists will choose how best to address the challenges we face. We will control our own destiny.

Facts on Health Benefits and the Mercer Report:

– “No critical barriers to combining the funds”

– Combination could generate savings to be applied toward improving benefits

Over the past few weeks, management and union Trustees of the SAG Pension & Health Plans and the AFTRA Health & Retirement Funds have been reviewing the “Mercer report”, a preliminary assessment of the feasibility of combining the health and/or pension plans of the two unions

The core finding of the report is emphatic and clear: (a) there are “no critical barriers” to combining the funds, and (b) such a combination could generate savings to be applied toward improving benefits. The Report also notes that the funding levels of the two plans are nearly identical.

Based on that report, the Trustees of both plans have authorized their administrators and consultants jointly to develop alternative approaches for combining the health and pension plans. Those recommendations will be presented to the Trustees for their consideration.

Although we hope the management Trustees join with us in that goal, it is certainly not the only viable option available to the unions. It is important to remember that the very existence of the SAG and AFTRA funds emanates from the unions’ collective bargaining agreements, which are under the control of the unions. Those contracts dictate the flow of contributions into the funds. Regardless of whether the Trustees take action, a single combined union could achieve a single combined plan through the collective bargaining process. If consolidation is approved, the Unions can and will seek to control their own destiny on this matter of critical importance to our members.

The Mercer report indicates that, although structured differently, the plans share many similarities in the operations they administer, the types of coverage offered and the benefit designs. The Mercer report also outlines a limited number of challenges that must be addressed in any proposal to combine the funds. The different characteristics which give rise to these challenges (a) are extremely common with these types of funds, (b) generally exist in plans that are being reviewed for potential merging and, (c) contain elements that can be essentially reconciled in the design format of a merged plan.

For example, in outlining the differences between the SAG and AFTRA plans, the report points to current weaknesses in the AFTRA plans. Just two years ago, the SAG plan was beset by similar difficulties. Health and pension plans nationally continue to be subject to pendulum swings and marketplace vagaries. We are convinced that this actuarial analysis clearly articulates the urgency of our quest to strengthen and protect the funds for the long term.

One thing the report does not examine – an environmental factor in the industry rather than an element of the plans -- is the potential ramification that the trend toward digital production could have on member benefits. Without clear jurisdictional guidelines, producers have the opportunity to “shop” and therefore drive down rates. In many instances, lower terms are already being applied to digital. As this reduces earnings, it will also impact contributions to the plans. As coverage shifts, members will no longer be able to assume that work in a certain area will result in contributions to a specific plan. This eliminates their ability to focus on work in one area and ensure that contributions are dominant enough in one fund or the other to maximize benefits and eligibility.

The Joint Committee of SAG and AFTRA members who developed the Consolidation and Affiliation Plan commissioned the Mercer report. Its sole purpose was to clarify for Trustees whether a more comprehensive review would be appropriate. In fact, based upon the report, both sets of Trustees have requested a more extensive and comprehensive feasibility review. It is that anticipated review, not this preliminary report, which will provide the basis for the trustees’ decisions as to whether a merger of the funds is in the best interests of participants. We have no reason to believe that future analyses will yield any different conclusion.

Please contact us with your thoughts and input.

Contact

SAG Communications Department

Ph: (323) 549-6654

Fx: (323) 549-6656

communications@sag.org

Screen Actors Guild

Attn: Communications Department

5757 Wilshire Blvd.

Los Angeles, CA 90036