Contested Pensionable Allocations Now Subject to Arbitration

June 11, 2008 - An Arbitration decision announced on June 11, 2008 has effectively ended the union’s 30 year practice of unilaterally determining pensionable allocations in multi-service talent agreements.

The SAG Pension and Health Funds routinely audit multi-service talent contracts and make their own determinations regarding pensionable allocations. Until now, the decisions by the Funds have in practice been the final word on how much pension is owed in multi-service talent agreements, which very often involve large guarantees to celebrities.

In 2007, the SAG Pension and Health Funds issued new guidelines for determining pensionable allocations. After receiving a number of complaints from the industry, the AAAA-ANA Joint Policy Committee on Broadcast Talent Relations (JPC) filed for arbitration on behalf of the industry seeking a declaration that the Funds have exceeded their authority in these practices and any such guidelines may only be issued and enforced through collective bargaining.

The Arbitrator issued a decision in favor of the JPC’s position on June 11, 2008, which is referred to as the Tillem Decision. This decision effectively ends the Funds’ practice of unilaterally deciding pensionable allocations under the threat of Federal ERISA litigation.

Under the Tillem Decision, although the Funds still have the right to audit pension contributions, they no longer have the sole authority to make pension allocation determinations. If a dispute regarding pension allocations arises and agreement cannot be reached, advertisers and ad agencies now have recourse to arbitration.

Click here for a copy of the JPC’s press release regarding the arbitrator’s decision. Click here for the full text of the Arbitration Decision.

For further information, please contact Shannon Kerns, Judy Santi, Muriel Katz, or Kat Krone.

Shannon	(818) 441-5210	skerns@teamservices.net
Judy	(818) 441-5225	jsanti@teamservices.net
Muriel	(818) 441-5215	mkatz@teamservices.net
Kat	(818) 303-7331	kkrone@teamservices.net