As the United Auto Workers are poised to strike the big three Detroit automakers starting at midnight tonight unless a last-minute agreement is reached, some of the fallout from another major strike is coming to light in the form of retirement plan withdrawals.
Variety reports that entertainment workers have moved to take more than $44 million out of their individual retirement accounts via hardship withdrawals to help them cope financially in the wake of the prolonged writer’s strike.
The Hollywood trade publication said Monday that nearly 3,000 workers have filed for hardship withdrawals, citing an update circulated last Friday by the Motion Picture Industry Pension and Health Plans. The average withdrawal is about $15,000.
The MPIPHP announced the one-time hardship withdrawal program on July 31, and began accepting applications on Sept. 1. Members who participate in the defined contribution plan are eligible to take as much as 20% of their account balance, up to $20,000. Members who have not reached retirement age must pay a significant price to withdraw money early—a 10% federal penalty, plus a 2.5% penalty for California residents. Withdrawals are also taxed as ordinary income. That being the case, the unions are urging members to seek tax advice before applying for hardship withdrawals.
The Writers Guild of America strike against the Alliance of Motion Picture and Television Producers—a trade group that bargains for the major studios and streaming services—began on May 2 when agreement on new contract to replace a 3-year deal was not reached. That shut down most scripted TV and film productions.
The strikes have put many guild members in precarious financial situations. Variety said many workers have already used up any emergency savings they had, as many report not having worked since January or even last fall. With cash savings running out some have been scrambling to pick up temporary jobs to help them get by during the strike.
The Entertainment Community Fund has distributed more than $6.5 million in aid to 3,100 struggling workers, according to the Variety article. The Motion Picture and Television Fund also gives out grants up to $1,500, and the WGA and SAG-AFTRA have their own strike relief funds for members.
SEE ALSO:
• UAW Wants Pensions Back for Workers; Automakers Keen on 401(k)s
• 401(k) Balances Up in 2023, But So Are Hardship Withdrawals, Loans
• $1 Billion Flies from Delta 401k in Pandemic-Related Early Withdrawals
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.