New York Nurse: May 2010
The legislative fight for pension reform continues, as a lingering sluggish economy made certification of the NYSNA Pension Plan as “red” unavoidable on March 31.
The plan is currently solid, but actuaries have projected a funding deficiency over the next four years. The plan was more than 100% funded in January 2008 and its performance was in the top percentile of pension plans in the nation. But like most pension funds, its value dropped as a result of the recession, from $1.9 billion to $1.5 billion.
Last year, the plan’s trustees voted to take advantage of a provision in federal law that allowed it to retain its “green” rating for one year, to allow some time for the investment market to recover. But this provision wasn’t renewed by the U.S. Congress.
This combination of factors made the “red” designation for 2010 inevitable. As required by federal law, once a plan is declared “red,” its trustees must develop a financial plan to “rehabilitate” the fund.
“Although we have had excellent investment returns since March 2009, allowing our plan to have enough resources to cover current obligations, our concerns are with future funding, which needs to be addressed today to ensure our pension is there when each of us retire,” said NYSNA Pension Trustee William Honeycutt, from New York Presbyterian Hospital. “I am committed to giving 110% to maintaining our current pension plan as it now stands. But to succeed, I need the support of each and every individual.”
NYSNA has formed a Special Pension Rescue Task Force to educate members and build a mobilization campaign to advocate for maintaining the current plan.
“Financially, it’s not unrealistic to maintain the current plan. We believe it’s the responsibility of the Pension Plan trustees to do so,” said Jenmarie L. Byrnes, task force member from New Island Hospital. “If a default plan is initiated, the number of registered nurses that may be forced to retire prematurely would be devastating to patients, crippling hospitals’ ability to provide safe nurse-patient ratios.”
Federal legislation that would help protect defined-benefit pensions is continuing to make progress on Capitol Hill, a result of the combined efforts of NYSNA and its national union, the National Federation of Nurses (NFN):
The American Workers, State, and Business Relief Act of 2010, introduced in December 2009 by U.S. Rep. Charles Rangel (D-NY), passed the Senate in March. It would provide limited funding relief for multi-employer pension plans by offering a longer 30-year amortization of investment losses incurred in 2008 and 2009.
The “Preserve Benefits and Jobs Act of 2009,” introduced in October by U.S. Representatives Earl Pomeroy (D-ND) and Patrick Tiberi (R-OH), contains provisions to ensure the future benefits.
The “Create Jobs & Save Benefits Act of 2010” introduced in March by U.S. Senator Bob Casey Jr. (D-PA), would strengthen the current funding status of multi-employer plans, protect pensions of current and future retirees, and protect companies that contribute to these plans.
NYSNA believes that the hospitals themselves should also share in the responsibility of shoring up the fund for the future. When the economy was better, the hospitals contributed little or nothing to the fund.
A special edition newsletter discussing this situation and its implications in more depth was mailed to all plan participants in March. Special inter-regional meetings were held to discuss the pension plan on Feb. 4 and April 8.