Frequently Asked Questions
How long did negotiations take?
We began this process in March with each of the 13 West coast Studio Locals and met over 5 weeks during that time.
Why did it take so long?
The bargaining process can be a lengthy one. We had aggressive proposals and so did the employers. It took time to work through these issues. Several times the negotiations broke off because progress had stopped. It became apparent that we needed to bargain closer to expiration to get an acceptable contract.
What finally caused a deal to be reached?
There was no singular issue that caused a breakthrough. There are significant gains in the contract and it was the contract as a whole package that led to a deal. In the end, securing adequate funding in the health and pension plans and ensuring that we had made substantial progress regarding rest periods were the final two issues to be addressed before negotiations concluded.
MPI reported that our pensions are at 67% funded, why is that?
This funding level is not a surprise. Three years ago, we negotiated for a Pension increase of 10%. This increase, like the rest of our pensions, gets paid for over time. In the case of MPI (Motion Picture Industry Health and Pension Plans), it is over a 15-year period, beginning last year. Much like a mortgage, the funding of the pension improves over time. The MPI also reduced the investment return estimate to reflect the current low rate environment we are in and that is reflected in the funded ratio as well. The MPIPHP professional actuaries are projecting that the pension plan will remain in the “Green Zone” and that we will be over 80% in 7 years and 100% in 14 years. This was intentional and necessary to achieve the 10% pension increase we negotiated in the last round of Basic Agreement bargaining.
What does the Funded Benefit ratio mean?
The funded benefit ratio is the amount of pensions that would be paid for everyone that worked in the plan, regardless of whether they are vested, in the event that the pension plan ceased as of that day. The pension plan has more hours being contributed than ever before; the residuals that pay for these plans are up to $430 million a year, including $94 million generated from New Media in 2017, and our industry is doing well. The pension Plan is not at risk of ceasing to exist.
If only vested members receive pensions why do we count those that haven’t vested?
This is a requirement of the government and is anti-union legislation that was put in place during George W. Bush’s tenure. By requiring Unions to count anyone who ever collected one dollar of pension money, even if they only worked in the Industry for one single project, this legislation’s goal is to generate panic when none is necessary.
The funding for those that are vested is a whole different story. The plan actuaries stated that the Motion Picture Industry Pension Plan is currently at 70.6% funded for vested members and will be 100% funded for vested members by Jan 1. 2030. Those numbers are the best gauge of health for the Pension Plan.
Can the MPIP guarantee that that the benefits will be fully funded by then?
The bargaining committee uses several assumptions to best predict what the industry will do based on several factors. We used conservative estimates in projections of what funding the Health and Pension plans will need over the next several years; these projections include the number of work hours into the Plans, what percentage our investments return, and the amount of residual money that is generated per year. When we meet or beat the projections, the plans do well and reserves build. When something like the Great Recession hits, the plans need to spend down those reserve levels. In each area of income to the plans we are using conservative estimates that are lower than the 2017 results and, for cost estimates, the assumption is that healthcare inflation will continue to rise. Even with these conservative estimates we are projected to have 10 months of reserves in the active health plan and 8 months in the retiree plan at the end of the contract. And remember, these healthy amounts of reserves will be in place before we negotiate again for the 2021 successor agreement.
Is there an estimate of the contribution we expect to receive from ‘Streaming live-action features with budgets of $30 million or more and 96 minutes or more in length when distributed theatrically’ over the next 3 years? Will the new media contribution fully fund the pension plan?
This potential new revenue is hard to quantify and because of this, we did not include this new funding in our calculations to fund the Health and Pension Plans. Based on projects that would have qualified in recent years and announced plans by Netflix and others, the best estimate is for between $5m and $10 million per year.
Any money generated from this new source is additional to what is necessary to fund the Plans over the term of this agreement.
Does a ‘401k Feasibility Committee’ threaten our pensions?
No, not at all. The Basic Agreement has had a provision regarding a 401(k) study for years. The proposal to address this again came from the Union at the request of members who would like an option to save additional money in a tax deferred way.
Why do Editors get a 9 hour turnaround and Production gets 10 hours?
There are many differences in the terms and conditions of employment between the various crafts. Rest periods, night premiums, TV working conditions, wages and golden hours are only a couple of them. In the case of rest periods there are some with 8 hours of rest, some with 9 hours of rest and some with 10 or 11. Most of those with less than 10 hours of rest currently are expected to see an increase of one hour, which is what post production received.
What exactly happens if the deal is not ratified?
If the deal is not ratified then there is no deal. This means that everything negotiated up until this point can change significantly in both directions. The Bargaining committee, which is made up of representatives of the 13 West Coast Studio Locals, met for months prior to negotiations and designed the proposals that were brought forward through this process. The Committee is recommending this agreement overwhelmingly with only 1 Local opposed.
Is a ‘no’ vote on ratification a ‘yes’ vote on a strike?
Yes. A “no” vote is a strike authorization vote.
Why didn’t we call for a strike authorization vote? Does having strike authorization make us stronger in negotiations?
Negotiations are complicated and involve intense discussions where both sides have to respect the constantly evolving process in order to reach an agreement. Strike votes are best utilized when talks have broken down completely. There is a time and a place for a strike vote. Fortunately, it was not necessary during this round of bargaining.
Have the locals finished their individual negotiations? What is the difference between the local negotiations and the Basic negotiations?
Yes. Each Local concluded their craft specific negotiations.
The West Coast Locals’ Leadership each bargained their agreements over a two-week period at the beginning of negotiations in April. Those negotiations were meant to address specific issues that each local brought before the Producers. The General Basic Agreement negotiations pertain to the wage increases, working conditions and employer-funded benefit contributions that affect everyone.
Why did we negotiate two different contribution amounts from the Employers?
The actual cost of the health care benefits are around $15 per hour. On the west coast, employers in 2017 paid less than $7 per hour. The difference has been made up, in large part, through residual contributions. To help even out the discrepancy between those who pay residuals, and those who pay very little, an additional contribution was negotiated for those who pay less than $15 million in residuals (in a three-year period). The independents will pay $0.75 in each year of the Agreement. Those companies include some very large producers for the streaming services, such as Netflix and Amazon. For employers who contribute more than $15 million in residuals, they shall pay $0.40 over the life of the contract. Much like commercial producers who pay $3 per hour more than what is contained in the Basic because they don’t pay residuals, this will help even out the imbalance of who helps to properly fund the plans.
What funds the pension?
The Motion Picture Industry Pension and Health Plan receives funding through three revenue streams: employer contributions, returns on the underlying investments in the fund and residuals (movies-shown-on-free-television, DVD/Videotape sales, and television and features that are shown on streaming services).
Our 10% pension increase must meet funding requirements on January 1, 2021. Do we have enough money to trigger that pension increase?
With the new employer contributions to the Health Plan, and the employer-paid monies generated by the new payment due for high budget streaming feature productions, as well as the growing amount of residuals generated by the 5.4% contribution for all content sold to be shown on streaming services, our projections show the pension funded to trigger the 2021 pension increase.
With the increased employer contributions and the yearly wage increases in these negotiations, what is the estimated monetary value of our new Agreement?
In excess of $750,000,000 in wages and IAP contributions and $150,000,000 in health and pension.
Besides the financial gains, what was achieved to provide better standards of living and a safer work environment?
Increased rest periods for daily and weekly employees was a very important priority for the bargaining unit. For hourly and weekly on-production and off-production employees on one-hour dramatic and half-hour single-camera series beyond season one and mini-series, a minimum daily ten-hour turnaround will become the new standard for local and nearby hires. Crew members with less than a 10-hour turnaround will receive an improved rest period on feature and long-form productions after the second consecutive 14-hour day.
Hourly and weekly post-production employees will also gain an additional hour of turnaround across the board for similar series and content, and two 14-hour consecutive days will trigger a nine-hour turnaround on those types of productions.
Also, employers must now offer housing or roundtrip transportation for crew working longer than 14 hours, or beyond 12 hours in the secondary zone. Also, any IA member who advocates for another crew member’s safety has added protections and arbitration provisions if there is an employer infraction.
Were we able to improve the New Media Sideletter at all?
Yes, for both lower-budget and high-budget projects.
There are now wages, terms, and conditions for mid-level Subscription Video on Demand (SVOD such as Hulu, Netflix, Amazon, etc.). For the following budget ranges, the Long Form Sideletter, with a 2 year wage rollback, will apply:
20-35 minutes $900,000-$1,300,000
36-65 minutes $1,750,000-$2,500,000
66 minutes + $2,100,000-$3,000,000
Previously these projects were completely “as negotiated.”
At the other end of the financial spectrum, feature-length SVOD projects that are budgeted at $30M and above will be produced under the full Basic Agreement, instead of the Long Form Sideletter.
Also, the New Media Roster has been absorbed into the Industry Experience Roster. No longer will members be limited in their employment options moving from streaming productions onto feature or television projects.
Did we negotiate the first new media residual in an IATSE contract?
No, we already have residuals paid for content that is shown on streaming services. Employers pay 5.4% of gross when a television series or theatrical feature is sold to an online platform. It was also negotiated that our existing residual structure (post 60's and supplemental markets) would apply to streaming content.
In 2017, this residual generated $94 million. In the first half of 2018, this residual is up 28% from the same time last year.
What is the ratification process?
Per the International Constitution, the west coast locals must ratify the Basic Agreement by a secret ballot vote. Each local will send their members a ballot with a copy of the Memorandum of Agreement and additional material from the Local, along with voting instructions. There will be a date set to count the ballots. The vote will be decided by a simple majority of the ballots received.
Each local is assigned a number of votes equal to their delegate count for the quadrennial convention. Each local will cast all of their delegate votes based on the results of the secret ballot vote of their members. The ratification will be decided by a simple majority of the delegate vote count.
If a member doesn’t vote, is that counted as a yes or no vote? Or not part of the final tally at all?
Only the ballots that were returned will be counted. Therefore, not voting only means you are giving up your voice on the matter of ratification.