AFTRA fund trustees say merger difficult

Trustees of the AFTRA Health & Retirement Funds have entered into the debate over merging the Screen Actors Guild and the American Federation of Television & Radio Artists. The trustees, in a statement issued Thursday, have poured cold water on a recently announced "feasibility review" about merging the AFTRA plan with the SAG pension and health plans. SAG and AFTRA had disclosed the feasibility review -- a collection of attorneys' opinions that there's no legal impediment to merging the independently operated plans -- as part of this week's unveiling of the details of a proposed SAG and AFTRA merger. Merger backers are contending that combining SAG and AFTRA will make it easier to combine the plans as a first step toward resolving the problem that performers face in making contributions to the separate plans and then not meeting the earnings qualifications. But AFTRA plan trustees said they have nothing to do with the feasibility review -- while acknowledging that the review's legal opinions included one from co-counsel to the AFTRA Health & Retirement Funds, Jani Rachelson. "The board of trustees of the AFTRA Health & Retirement Funds wishes to make it absolutely clear that the opinions expressed in this 'Feasibility Review' in no way represent the opinion of AFTRA H&R's board of trustees," the trustees said. "The board of trustees did not request or authorize this opinion of Fund co-counsel and had no prior knowledge of this letter before reading the posting on the websites." The AFTRA plan trustees also warned that combining the SAG and AFTRA plans would be a major challenge. "Although there is no doubt that plan mergers are legally permissible in appropriate circumstances, the merger of pension and health funds as large and divergent as the AFTRA and SAG plans raises complex and unique financial, legal and benefit issues which can only be addressed through a comprehensive analysis performed by the funds," the AFTRA trustees said. "No position has been, or will be, taken by the AFTRA Health & Retirement Funds Trustees or its co-counsel until such time as a comprehensive feasibility study is performed." SAG and AFTRA will mail out ballots Feb. 27 to 120,000 SAG members and 70,000 AFTRA members, with a tabulation date of March 30. To be approved, the merger must receive at least 60% of the votes from each union. The unions' summary of the "feasibility study" noted that several hundred multiemployer pensions have merged over the last 25 years, and there is no legal obstacle to merging the SAG and AFTRA pension and health plans. It also said multiemployer plan mergers do not pose any increased risk of loss of benefits. The summary also said, "Mergers are common and beneficial because they strengthen the financial base of the surviving plan, reduce administrative expenses and permit employees to concentrate their covered work under one benefit structure." The debate over whether SAG's and AFTRA's pension and health plans should be merged became a major issue in 2003. In that contest, 58% of SAG voters backed the proposal -- less than 2,000 votes short of meeting the 60% requirement. In that contest, the SAG management trustees on a merger study committee said they could not support merger. "While we take no position on the internal union issue of consolidating memberships, we do serve as fiduciaries of the SAG-Producer Pension and Health Plans and, as such, have a legal responsibility to SAG plans participants," the management trustees said in 2003. "These legal responsibilities, which are borne equally by both Producer and Union Trustees, prevent us from supporting a merger of the SAG and AFTRA plans if the merger is not in the best interests of SAG participants." At the time, SAG president Melissa Gilbert and AFTRA president John Connolly attacked the trustees as meddling in union politics and declared, "We know we can't rely on employers to look out for our best interests." The management trustees denied the accusations that their comments were motivated by a desire to derail the proposed SAG-AFTRA consolidation. Contact Dave McNary at dave.mcnary@variety.com