NEW YORK NURSE: July/August 2009
Fresh off its victory in March of maintaining its pension plan’s good or “green” rating for one year, NYSNA is turning its attention toward reforming the Pension Protection Act (PPA) of 2006.
NYSNA has formed a Pension Member Mobilization Committee, chaired by John Hiltunen, a member of the NYSNA Board of Directors and vice president of the Congress of Bargaining Unit Leaders to coordinate campaign strategy, including a legislative campaign.
Members have written letters to President Barack Obama and Congress. NYSNA leaders have traveled twice to Washington, D.C., to meet with Congress members. Now we must do more and lobby Congress representatives locally.
The PPA was intended to ensure employee pensions are adequately funded. But multi-employer defined-benefit pension plans that have already been hurt by the economic crisis could be further punished under the PPA.
If a pension plan is considered to be underfunded, the PPA requires that its trustees develop at least one strategy for rehabilitation within a certain period of time – called a “default” plan – that reduces benefits. Many plans that experienced a recent sudden, unprecedented downturn in investments are at risk of being considered underfunded.
Some employers, however, may see rehabilitation plans as opportunities to cut costs or get out of plans altogether.
Additional federal legislation in 2008 gave pension plans a one-time opportunity to declare their ratings “good” in order to postpone implementation of rehabilitation plans, in the hope of a market turnaround in 2009. This is what the NYSNA plan trustees did.
“Historically the NYSNA Pension Plan has been fully funded,” said Nancy Kaleda, special projects manager for the Economic and General Welfare Program. “It’s the collision between the financial market and the PPA that’s left us in a situation in which we will have a projected deficit.”
During the current economic downturn, the NYSNA Pension Plan performed as well as the average defined benefit plan in the nation. From 1998 through 2008, the plan outperformed more than 90% of all other defined benefit plans. After the collapse of the investment market, it is projected the plan will have a funding deficit within the next four years. The plan was more than 100% funded in January 2008. Investment returns for 2009 have been positive.
“We’re not only advocating for the NYSNA Pension Plan,” Kaleda added. “We also have members in single-employer defined contribution plans that need legislative relief.”
But nurses have a unique concern. “If faced with benefit cuts, we may see a situation where there’s a mass retirement,” Kaleda said, adding that in some NYSNA bargaining units, nearly 50% of members are eligible to retire right now. “This will intensify the existing nursing shortage. Nurses devote their lives to advocating for patients; now we must advocate for their secure retirement.”
Unless changes such as these are made to the PPA, hard-working nurses may face reductions in the benefits they have been counting on for their retirement:
You worked hard for your pension and NYSNA has worked hard to protect it. Now we must work together to secure your retirement benefits and make sure that all NYSNA members receive the pensions they deserve.
Here’s what you can do: