Dues Referendum 2014 - guest post

Why a dues increase?

We need one. Has Equity cut costs? Yes it has. Will we continue to find ways to cut costs? I assure you that I, and others on Council are pushing for them. Yes, we will. Are you satisfied with the service you receive from Equity? I’d be surprised to hear you are, considering the earful of frustration I’ve listened to over the years.

I’m here to tell you there have been major changes to the mindset running Equity. If you haven’t already noticed, there are some new rules and genuine flexibility going on as we contemplate all this. There is also a commitment to greater transparency and less paternalism; the challenge we now face is to service our almost 6,000 strong membership with enough staff to deal with daily business as well as the never ending renegotiating of the various agreements staggered strategically to ideally allow one agreement’s attention at a time.

After looking at various scenarios, we as a Council have decided to ask for an increase of $45 a year in basic dues (so, $90 every six months, instead of the current $67.50), and a 0.25 percent increase in working dues. There will be no other increases for the next six years at the very least, and if any may be needed then, or even at a later date, we will go to you the members first for another vote before we can implement anything at all. Like we are doing here.

At the core of all of this is this: do you want a strong association representing and serving you? We need a two-thirds majority in this vote to move ahead. A simple majority like we received in the last dues referendum is not sufficient. I cannot stress enough how important it is that you not only vote yes, but that you also help convince others to do the same.

Please take the time to look at the issues and make an informed decision. I am confident you will reach the same conclusion I have and vote yes. Otherwise, trust me and vote yes anyway.

Thanking you for your attention.

In Solidarity,

Howard Rosenstein

National Councilor for Quebec

Dues Referendum 2014 - where the money goes

We've let you know the reason that Council is asking your support for a dues increase, but it's important to also let you know what your dues money does…

Everything.

Your dues cover the overwhelming majority of the costs of running the association and providing services to members. They pay for negotiations, contract review, advocacy, administration of the insurance and RRSP plans, all communications to the members, membership meetings, the governance of the association by elected members, overall administration, etc. In short, all the operational costs of Equity are paid for by its members.

Based on the 2013-2014 budget, the overall costs break out as follows:

Contract Negotiation, Administration and Review.........................62%
General Administrative and Office Overhead...............................30%
Governance (Council)............................................................8%

Of course, there's lots more to a whole year's worth of numbers than that, but the financial report doesn't really translate readily into a blog post. You can find 2011-2012 audited statement here if you want more details.

Ok, so that's where the money goes. But are we using it prudently, and have we taken all reasonable steps to cut back on expenses?

Absolutely – we do that as a matter of course. The basic dues amount that used to purchase $135 of business services, supplies and manpower in 1999, now only purchases (comparatively) $90 worth. Over that time, we have steadily pruned costs wherever possible to keep pace with the reduction in purchasing power.

In the past 3 years alone we have:

• elected to not replace one senior staff member who left, despite the fact that we desperately needed someone at that level 
• cut an additional part-time position 
• cut EQ magazine from four to three issues per year 
• discontinued our one Council meeting per year held outside Toronto 
• cut staff travel to the various regions 
• cut the professional development subsidy by 75% 
• changed the honours ceremony to be held biennially, and combined it with the national AGM to save costs 
• changed how Council apportions resources to committees and advisories 

On top of that, Council recently approved another $35,000 in savings, including potentially discontinuing all remaining professional development subsidies and the honours programme.

Additionally, Council sets expense priorities (based on member input), sets tendering requirements for major expenses, and regularly monitors finances to ensure that money is being spent effectively and efficiently. With the aid of our Finance Monitoring Committee, our external financial consultant, and our auditor, there is no area of association activity that sees more monitoring attention than Equity's finances. Hey, it's our money in there, too!

When you receive your voter package, Council encourages you to vote “yes”. It’s your association – please support Equity, so Equity can support you.

Dues Referendum 2014 - guest post

From Stats Can: "In the past decade, the average price for food staples has risen. From 1999 to 2009, the average price of a loaf of bread has increased from $1.31 to $2.50, a dozen eggs from $1.77 to $2.61, 454 grams of butter from $3.01 to $4.35, a litre of partly skimmed milk from $1.41 to $2.11 and 1 kg of ground beef from $3.90 to $7.02."

Are you paying the same amount for rent, utilities, transit, phone, cosmetics, gym membership, etc as you did in 1999? How can any Equity card-carrying member expect their Association to continue operating our "business of show" at a loss?  I run my own gardening business when I'm not onstage, and much as I hate to raise my fees, I must, if I want to maintain a high standard of service to my clients. Revenue Canada wouldn't tolerate a business running at a loss for long. 

I fully support increasing our dues rate and keeping CAEA operational at the high standard of service we have come to expect, and indeed, need.  CAEA has had my back in a number of disputes with producers and I hate to imagine the dark days of no regulation. I ask you to keep us strong and united by keeping our professional Association in good business stead.

Paula Wolfson
Member, Ontario

Dues Referendum 2014 - the proposal

As you may be aware, Council has been carefully monitoring Equity's ongoing financial stability for several years now. Although we have been able to weather inflation for most of the last decade and a half, it has finally caught up with us.

In response to increased costs over the past 14 years, Council proposes to adjust basic dues to $180 (currently $135), coupled with a change in working dues to 2.25% (currently 2%). Because a change in the dues rate requires member approval, we will be conducting a referendum on the matter this coming February.

At Council's request, staff prepared 5 different dues adjustment projections for our consideration: a change in basic dues only; a combination of changes to basic and working dues, and three options for a change in working dues only. We went with a combined basic and working dues format based on member feedback, which suggested that a modest increase to basic dues, coupled with a small increase to working dues, would be an appropriately balanced approach. 

The final work was done at our June 2013 Council meeting. Using real-time financial projections, we adjusted the amounts to what we anticipate members will regard as fair, reasonable and bearable across the whole spectrum of member incomes.

So, what will the proposed change in dues look like on your paycheque? If approved, the semi-annual dues billing will go up to $90 in May and November, or an increase of $3.75 per month. On the working dues side, the rate would increase to 2.25%, so a member in the middle of our income range, earning about $15,000 per year, would see working dues go up by $37.50 for the whole year.

We value informed voters, so if you want more info, we want to hear from you. Contact us at duesreferendum@caea.com and we'll get you the answers you need.

When you receive your voter package, Council encourages you to vote “yes”. It’s your association – please support Equity, so Equity can support you.

Dues Referendum 2014

As I write this, the final layout for the winter issue of EQ is on it’s way to the printers, and you should be seeing it in your inboxes and mailboxes (where those continue to exist) within a few weeks.

We’ve been talking about the upcoming dues referendum for a while now, and this issue of EQ will feature a special wraparound supplement on the topic. Even if your habit is (as is mine) that the magazine goes onto the breakfast table for reading in the next week or three, Council strongly encourages you to have a look at the referendum section as soon as you get it. We want you to be able to make an informed decision, which means we also want you to be able to read the material, ponder it, and still have the time to ask questions if you need more details.

To assist in getting you the info you need, Council will be holding a series of in-person meetings across the country in January and February, with the last of them being webcast, so that people can participate from wherever they are. We may also add some online forum sessions as needed, closer to the vote deadline.

All life and regular members in good standing will be receiving a voter kit early in the new year, and online and phone voting will open on February 3. Members not currently in good standing have until February 13 to rectify that, in order to be able to participate. Voting closes on February 20. You can find the whole timeline of voting and member meetings on the back of the EQ supplement.

I gotta tell you something – Council absolutely hates having to ask the members for a dues increase. But, after 14 years without one, we don’t have a choice.

You, however, do. When you exercise it, we hope that you choose to say “yes”, so that Equity can continue to work on your behalf, and to improve what we are able to do for you. It’s your association – please support Equity, so Equity can support you.

Equity RRSPs - a comparison

A few weeks back, I was buttonholed by a friend who wanted to know why her Equity RRSP returns were so "lousy" compared to another industry RRSP she held. The question took me by surprise, since our RRSP committee reviews fund performance every year against similar funds on the market, and then reports their findings to Council. I can only remember one occasion when the committee had anything bad to say, and that only about a single fund some time ago. (The fund has long since been replaced.)

Anyhow, the whole discussion got me thinking. How do our RRSP funds stack up against those on offer by our sister organisations? Quite nicely, as it turns out. Time for another chart.

Funds comparison, 3rd quarter, 2013

These results are from the most recent quarter, as provided in member reports. Note that some funds have not been around for 10 years, hence the missing grey bars on the right.

Looking at our slate of conservative, moderate, balanced, advanced and aggressive funds, it's interesting to see that they perform exactly as one might expect. Conservative and moderate (medium red, green) have some variation over time, but pretty much chug along year after year with fairly consistent results: low volatility, with decent (if modest) returns.

The balanced fund (purple) has a little bit more swing to it over time, but comes out well in the long term. This is our default fund, and accounts for about 82% of all retirement assets, with 75% of participants holding this fund.

The advanced, aggressive and global equity funds (light blue, orange, medium blue) certainly do very well when they do well, but they are also higher risk investments and have much more volatility. The chart above doesn't show annual data, but the down years for these funds tend to be just as pronounced as their up years. As a result, they still end up in the same ballpark as all the others over the long term. Depending on when you buy in, a member could do pretty well. Or not. If only one could know in advance when these were going to skyrocket and dip…

Ethics (deep red) also bounces around a bit, but has still performed well over time. The lowly money market fund (short, dark blue) is not really an investment fund as such, and is only included here for completeness. It can be useful in circumstances when stability is critical.

All told, we have 8 different funds so that members at various ages and stages of their career can put together the investment mix best suited to them. Members contribute from every pay cheque, and have the ability to make additional contributions as well.

RRSP season is all year round for Equity members, so if you have questions about where your money is being held, and whether it is the right mix for you, your "retirement" horizon (I use the word loosely) and your risk tolerance, give Great West Life a call and talk to an investment advisor. They can, well, advise you. If you already did that some years ago, don't forget to do it periodically to keep up to date. Maybe do it now before the February RRSP crunch hits.

And of course, the all-important disclaimer: past performance is no guarantee of future results, etc.

Did you know? - how we came to be known as "Equity"?

I was reading through Performance of the Century, by Robert Simonson, about the first 100 years of American Equity, and found the following, describing the genesis of AEA.

In desperation, a few actors decided to give the organization another chance. On January 13, 1913 – less than a month after the death of the Actors' Society of America, which had tried unsuccessfully for sixteen years to negotiate with the producers – William Harcourt, Charles D. Coburn, Arthur Byron, Milton Sills and Frank Gillmore gathered […] to decide "upon a uniform form of contract that would be alike acceptable to the fair-minded engager and the fair-minded actor."

And from a subsequent meeting on February 4…

William Courtleigh, a Canadian-born actor […] deserves a place in [the union's] history for suggesting "Equity" as a name. The motion was unanimously carried.

Well, whaddaya know?!