Oregon Nurses Association
11/15/06
PPMC BARGAINING UPDATE:
Management Brings Consulting Actuary to the Table to Explain the Retirement Plan; Management Responds to Only Two of Our Proposals
On 11/1/06 our team met with management for the 4th session of negotiations, having recently given all our proposals, including wages, retirement and healthcare improvements. In response, management brought an outside financial analyst. The information & graphs provided presented Providence’s plan in a very good light, leaving out OHSU and Kaiser. However, this is different than the conclusion we came to based on some simple factors provided below. Also, they did not refute the data that we shared with them that highlighted areas where we saw that the plan was deficient. We have included a copy of the information we provided on the back. Take a look for yourself. You decide. How does our retirement
look?
HOW DOES OUR RETIRMENT BENEFIT REALLY MEASURE UP?
Hospital Pension/Define Required RN d Contribution Benefit 1.5% Pension Factor 1.45% Pension Factor 0 0% Max Matching Benefit 6 0%
OHSU Kaiser
Legacy Willamette Falls Tuality Providence
1% Pension Factor 0.85% Pension Factor 1% Pension Factor 5% of RN’s Earnings
4% 6% 3%
2% 4% 3% 1.5% 2.25% < 5 yr 3% < 10 yr
Some Points to Keep in Mind:
All of the Hospitals listed have a pension formula while Providence has a Cash Balance Account, based on compounding 5% of the RN’s earnings. Pension Formula: Last Ave Monthly Salary x Years of Service x Pension Factor = Monthly Retirement Benefit. To compete with OHSU, Providence would have to increase their pension contribution by half – that’s 2.5%. At $35/hr, 36hr/wk, that is an increase of $0.88/hr, $126.72/mo!
OUR PROPOSALS
PTO We don’t have to replace ourselves when our PTO has been approved. Providence to provide PTO denials and approval procedures to the PNCC. CHARGE NURSE Providence not to assign any supervisory duties to bargaining unit nurses, thereby guaranteeing that all nurses will have the protection of a contract.
THEIR 10/8 COUNTERPROPOSALS
They agreed in essence to what we are trying to accomplish: a fair & transparent way to grant PTO requests. They did not
agree to providing copies of policies and denied PTO to the PNCC. The Hospital does not want to introduce any new language to the contract to address this issue, but wants to assure us that they will not challenge the status of AHNs or charge nurses. We are pleased that Providence does not want to exclude any of us from the unit, but, we still say: PUT IT IN WRITING!
Understanding your retirement at Providence in Comparison to other Hospitals in the Metro Area.
There are two types of retirement benefits offered — defined contribution plans and defined benefit plans. In a defined contribution plan, an employer contributes each year a percentage of an employee’s salary into a 401(k)-type individual account and leaves it to the employee the responsibility of investing these assets prudently. If an employees’ investments do not turn out well, or if the employee retires during a period of declining stock values, or if the employee outlives the value of his assets, then the employee is stuck without a core retirement income. In a defined benefit plan, an employer also contributes to an employee’s retirement, but the employer is responsible for the investing and ultimately for providing the benefit even when the employer’s money management and investments do not do well. The benefit is also defined in that the retirement benefit is provided based on salary and years of service and a retirement factor. The benefit is provided for the life of the individual, not based on how much is in the account. The defined benefit at Providence is the CORE Plan. The defined contribution at Providence is the VALUE Plan. Providence makes a contribution to the employee’s CORE plan based on 5% of wages earned. The contribution maximum from Providence for the VALUE Plan is 1.5% for an employee’s
diverted 3% from their wages.
How we came up with the graph for the Defined Benefit.
These retirement scenarios are based on a nurse who works fulltime for 27 years with a final salary of $120,256 (remember that salary is a projection into the future that assumes annual 3% wage increases) who also retires at age 65. All of the employers listed except for Providence have a pension formula consisting of the average of final monthly salary over the last five years, multiplied by years of service, and a pension factor. The pension factor for Willamette Falls is .85%, Tuality and Legacy 1%, Kaiser 1.45%, and at OHSU PERS (tier 3) the pension factor is 1.5%. The larger the pension fact, the richer the benefit that is provided. Providence has a Cash Balance Account. It is like a 401k except that the benefit is guaranteed. The value of the nurses retirement is based on compounding 5% of a nurse’s earnings each year with wage inflation of 3% and an investment return of 8%.
Where is the Best Pension/Defined Benefit
The Monthly Retirement Benefit For This Nurse
Providence Willamette Falls Tuality Legacy OHSU Kaiser 0 1,000 2,000 3,000 4,000 5,000
How we came up with the graph for the Defined Contribution
These scenarios are based on a nurse who has been working at each of these employers for 10 years earning $34.63 an hour working full-time (36 hours a week). The chart shows how much of a contribution the nurse’s employer will make and how much of match is required by the nurse out of her paycheck in order to earn the match. Generally the less an employee needs to contribute to get the match the better the benefit is.
Where is the Best 401k/Defined Contribution
The Annual Contribution to the 401k For This Nurse
4,000 3,000 2,000 1,000 0 OHSU Legacy Tuality Employee WFH Providence
Hospital
Next Session: November 29, 2006 10am Board Room. All RNS welcome!
Oregon Nurses Association
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