- Why did ACTRA decide to establish a Minor’s Trust?
- Why not let government do it, like in BC and in California?
- What will happen to the 25% contribution from a minor’s earnings?
- What is this going to cost me?
- May I as a parent or legal guardian, opt out of the ACTRA Minor’s Trust on the grounds that I want different investment options than those provided by ACTRA PRS, or if the minor has a need for the monies before he/she reaches the age of 18?
- Can I have the option to make additional contributions directly?
- Do we need tax advice?
1. Why did ACTRA decide to establish a minor’s Trust?
ACTRA has always taken its duty to protect the unique interests a minor seriously and establishing the ACTRA minor’s Trust is a manifestation of this duty.
In California a law designed to protect the earnings of child actors, known as the Coogan Law was enacted in 1939. The law was named for child actor Jackie Coogan, who filed suit against his parents to recover the $4 million fortune he had made as a popular child actor. However the law was ineffective and the Screen Actors Guild lobbied to have it amended. California’s new Coogan Law (SB 1162), became effective on January 1, 2000 and it ensures that every time young performers work under an entertainment contract, 15% of the gross earnings will be set aside for them until they reach legal majority. The bill also makes it clear that the earnings of a minor are the legal property of the minor and not his parents.
The provisions of A2716 of the IPA and Article 1611 of the NCA are to some extent based upon the legislative provisions in the Province of British Columbia, in that they are both designed to ensure that 25% of all minor’s lifetime earnings over $5,000 will be available to the child when they reach the age of majority.
The rights and interests of minors now defined in the IPA and NCA as performers under the age of 18, have always received special attention in the ACTRA collective agreements. There is one Article in the IPA, Art. 27, which contains a detailed code regarding the engagement and treatment of minor’s on set. In 1999 ACTRA made the reform of Art. 27, one of the central issues in bargaining. As part of this broader strategy to significantly improve and enhance the minor’s rights, Art. A2716 was negotiated into the IPA and more recently the same language was negotiated into the NCA.
2. Why not let Government do it – like in BC and in California?
ACTRA, as a democratic organization, feels strongly that it is often in a better position to protect the interests of its members. In fact the raison d’être of ACTRA is the representation of performers and the promotion of performers’ rights, contractual, statutory or otherwise.
As an example, when it became obvious that actors were being ill-served by the Insurance industry, who did not understand the particular needs of artists who are often independent contractors, ACTRA created the ACTRA Fraternal Benefit Society (AFBS). The AFBS has been a resounding social and financial success. In the case of the ACTRA Minor’s Trust, ACTRA knows it can do a better job than governments – even if provincial legislatures had the will to enact laws to protect minor’s earnings, since we are closer and more accountable to its members and understands their needs.
The ACTRA Minor’s Trust uses the expertise of the Royal Bank of Canada to ensure that each of the Minor’s Trust options are efficiently administered and that the fundamental values of transparency and accountability are respected.
3. What will happen to the 25% contribution from a minor’s earnings?
As of September 4, 2001, any minor whose lifetime earnings reach $5,000 while they are working as a performer under ACTRA’s jurisdiction, is subject to A2716 and 25% of his or her earnings (up until the minor reaches the age 18) are remitted to the ACTRA PRS. As of July 1, 2002, all minors working in ACTRA’s jurisdiction under the NCA are subject to the same provisions under article 1611.
There are two investment options: Royal Bank of Canada Target Fund Series; and/or Royal Bank of Canada Premium Money Market. These options are fully explained in the Minor’s Trust Account Set up Form.
A parent or legal guardian charged with the responsibility of making a choice among the two options must do so with due care and consideration taking into account all the relevant criteria applicable to the individual performer. You can also choose different investment options (see answer to question 5 below). ACTRA PRS is not in a position to understand the needs of each individual’s portfolio and will not provide any investment advice, nor can it provide any advice on the income tax implications. Please consult your accountant, financial planner or other professional advisors if they have questions about the options for the Trust.
After the parent or legal guardian selects their Trust Option(s), the producer engaging the minor remits the contributions from the minor’s earnings to ACTRA PRS, and these earnings are deposited into the option(s) selected by the parent or legal guardian. On an ongoing basis ACTRA PRS will report on each minor’s investment directly to the minor’s parent or legal guardian.
4. What is this going to cost me?
There are no annual administration fees payable to ACTRA PRS or its service providers. There is a processing fee of 2% payable at the time the minor’s contributions are remitted to ACTRA PRS calculated on the total contributions.
5. May I as a parent or legal guardian, opt out of the ACTRA minor’s Trust on the grounds that I want different investment options than those provided by ACTRA PRS, or if the minor has a need for the monies before he/she reaches the age of 18?
If a parent or legal guardian is able to satisfy ACTRA PRS that there is an established irrevocable trust, ACTRA PRS may grant an exemption.
Also ACTRA PRS may allow funds to be made available to a minor provided that there is a demonstrated need to encroach upon the Trust monies on the basis of:
- educational or professional development
- medical or psychological needs
Application forms for either of the above will be made available to the parent or legal guardian, upon request to ACTRA PRS.
6. Can I have the option to make additional contributions directly?
Yes, you can to make additional contributions directly, please contact ACTRA PRS for the necessary forms. Once the voluntary contributions have been remitted to ACTRA PRS for deposit in the Trust, these monies are subject to all of the rules and regulations established for the minor’s Trust.
7. Do we need tax advice?
We recommend that you obtain tax advice as monies earned while the funds are held in trust are taxable.
