In what might end up being the biggest case of blowback in Hollywood this season, the pro-merger forces in SAG and AFTRA apparently leaked a 2003 study of union benefit plans in an attempt to bolster their argument for a merger of the two unions.
The Mercer Report, prepared in connection with an earlier attempt at merger by an outside consulting group, does start out concluding as the pro-merger groups have argued that the separate health and pension plans maintained by the two unions could be merged. But it then quickly notes that there are “key philosophical differences” between the plans that will cause the trustees to “wrestle” with resolution of them in case of a merger.
It also poses a critical question for the unions: Is it “worth” it to take on those “key issues and challenges” in three major areas identified by the Report?
In fact, the Report puts on the table as an open question whether it makes sense or not to merge the benefits plans at all. The possibility of merging the plans after the merger of the unions has been a critical part of the argument for merger proponents. Now it is clear that the Report they themselves apparently leaked – the Report was said to be confidential – will actually undermine their arguments.
The Report will have to be scrutinized carefully and compared with current plan benefits, but even a cursory glance indicates that SAG’s plan is more generous in key areas, such as the threshold for family coverage for health care. The Report also notes that SAG “is generating much greater employer contributions.” It is this kind of “philosophical difference” that would mean a fierce post-merger battle if the unions merge first without resolving these differences.
Thus, the Mercer Report concludes that “it may be a challenge to find a common design that will be agreeable to both parties.” And they leave open as a “fall back” the idea of separate benefits structures for SAG and AFTRA even within a “combined plan.”
Of course, the pro-merger leaders of SAG and AFTRA are well aware of this upcoming battle. And they also know if they try to resolve these differences prior to merger the likelihood of getting SAG to compromise is greatly reduced. And of course compromise by SAG is the critical variable in this merger, of both the unions (where SAG’s rules against non-union work are stronger) and the benefits plans.