Saving for Retirement

“Most people are somewhat confused over what it is they have and what’s available,” she says. For those who seek more information, she discusses the three plans available to members: The Animation Guild 401(k), the MPIPHP Defined Benefit Plan (pension) and the Individual Account Plan. Here, she answers some of the most often asked questions.

Who runs the 401(k) plan? Don’t employers usually do it?

Typically 401(k) plans are offered by individual employers. We’re not sponsored by the employers. Our plan is sponsored by us—the Animation Guild. It’s not available through every union in the IA international. We’ve offered it [as] an additional way to help people prepare for retirement and it is entirely funded by the individuals. It’s money you choose to take out of your paycheck and put into this separate investment program. It’s portable amongst all of the employers [who are signatories]. And we don’t require that you ever take the money out of it because our 401(k) plan is set up so that you can continue contributing at multiple employers. If you leave the industry and then come back six months or a year later the 401(k) plan is still there and available for you to put more money into. Because of the nature of our industry, with people coming and going from jobs, we have set things up to accommodate their needs as much as possible. You can still keep your money in there and keep it invested. You can still take out a loan, or a partial distribution to accommodate your needs. And, if you want, you are entitled to take the money out as soon as you have met the separation requirement —after you’ve been laid off for 90 days.

What should I do if I’m interested in getting a loan through my 401(k) plan?

It’s not a bad idea to talk to me first because then we can discuss all the options and how it works. I can also give you instructions on how to get into the Vanguard system and set it up. The loans actually are done all through their website. Within the last couple of years we added an additional loan option. Now you can have more than one standard loan functioning simultaneously. So if you have an old 401(k) loan that you haven’t finished paying off, it’s no longer a restriction from you taking another loan [with] a future payoff date that’s not connected to the original loan. But we also have primary residence loans, which are like a bank loan [over] 30 years. So you can spread the payments out which reduces the overall burden on income tremendously.

How are my employers contributing to my retirement plans?

Under the Animation Guild as part of the IATSE Basic [agreement] the employers are already paying into the pension (Defined Benefit Plan) and the Individual Account Plan (IAP). As soon as you start working, your employer is paying into the MPIPHP, which covers health insurance, pension and the Individual Account Plan. Nothing comes out of an individual’s paycheck, that’s entirely funded by employer money. You’re not entitled to that money until you’re vested and you reach retirement age.

What is the difference between the IAP and Pension?

The Individual Account Plan is a fund that the employers pay into based on hours worked and rates of pay (6 percent of scale wages) while in the pension plan everyone accrues the same hourly contribution. When you retire, the IAP is like a bank account, you can take it out as either a lump [sum] or you’re going to take out [disbursements]. The IAP is invested like the 401(k). It’s growing because they’ve got it invested but it’s a defined amount of money. The pension is set up like an annuity. It’s something that pays out over a period of time to give you a certain amount of benefit per month based on your life expectancy.