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Equity's 401(k) Plan Helps Create a Better Life for Members

By Mark Zimmerman, President

An important part of Actors' Equity Association's mission is to find ways for our members to create a decent life for themselves because, as Actors we are rarely in control of our own destinies. The Union has a long history of doing just that, and in the 2000 Production Contract negotiations, we incorporated another important benefit into the language. This was the establishment of the 401(k) Plan.

Initially, this new benefit was for those members who worked under the Production Contract. But beginning in the summer of 2001, Equity has successfully negotiated it into most of the contracts it administers, with the eventual goal of inclusion in all contracts. Currently, Equity is one of only a handful of entertainment unions that can boast the inclusion of this benefit in its contracts.

If anyone is curious about the importance of a 401(k) Plan, then look at the episodic nature of our work. Because our chosen career doesn't guarantee 52 weeks a year of work, many of us may not accrue a pension that will afford us a comfortable retirement. A 401(k) Plan can supplement our retirement income.

Advantages
The benefits, however, are not just at retirement time. The 401(k) allows you to contribute to the plan with pre-tax money, reducing the amount of tax that is paid out of each paycheck. In addition, the capital grows tax-free until withdrawal. You can also decide where to direct contributions, giving you a lot of control over your investments. Another important aspect of the 401(k) Plan is that it's portable. Unlike pensions, which cannot be moved from the plan to another plan or IRA, a participant in the 401(k) can do just that. For example, a member can teach at a college or university and become a participant in a 401(k) Plan at the institution. That member can transfer his or her money from the Equity 401(k) to the new plan without penalty. And because a 401(k) is a personal investment program for your retirement, it is protected by federal ERISA (The Employee Retirement Income Security Act) laws.

A Separate Plan
Many people confuse the 401(k) Plan with the Equity League Pension Trust Fund. They are two separate plans and the monies don't co-mingle. The Equity 401(k) is an employee-contributed plan while the Pension Plan is a defined benefits plan in which the contributions are made by the employer into the fund and that percentage amount is contractually negotiated.

If you are scratching your head and are still curious about whether it's worth it or not, look at the stories making the national headlines. The cost of living is going up and more people are forced to continue working well past retirement age. While a 401(k) isn't going to ensure the high-life, it will definitely supplement our monthly pension stipend, making it less likely that we will have to work - just that we will continue to work because we love to work.