Under Funded Pension Pressures Nurses

In four decades of experience, Mercedes Herman, 58 is a registered nurse who contemplates to retire in 2010. She is planning to keep working for some more years at St. Luke's - Roosevelt Hospital in Manhattan. But to her, because of possible recession-driven changes, her employer-funded pension plan made her rethink of her future. Her potential retirement urged by a desire to protect an upper pension payout. This can lessen the ranks of an already overstretched workforce. Herman is a part of the union which gets 18,000 members in New York City, Long Island and Westchester of the state’s 250,000 registered nurses.

The probable exodus is the result of the federal Pension Protection Act of 2006, which may effect to severe cuts to the New York State Nurses Association (NYSNA) pension plan. It presented tough choices to some of the union’s registered nurses like retire now, or risk losing up to half their pension funds. The agony of Union officials is the retirement of up to 2,800 nurses over the next two years. They will leave instantly to collect their full benefits. This will worsen the city’s already dire nursing shortage. The country will have a scarcity of 1 million nurses in more than a decade according to the federal Health Resources and Services Administration. According to SUNY Albany’s Center for Health Workforce Studies, the number could strike 31,000 in New York City by year 2020. With this, the city recently gives solution to the shortage by following a new program which can place working nurses in guest faculty positions across CUNY nursing school. According to City Council projections, if the number of faculty will increase, this would allow CUNY to accept more nursing students, with an additional of 500 nurses in a span of five years. E. Michele Richardson, nursing division director at the Health Resources and Services Administration said that a cut in the number of working nurses would indicate less access to primary health care, less room for patients, and additional strain on the nurses who will stay in the field. If a hospital does not have enough number practitioners, they can accurately cripple the health care system.

According to the Healthcare Association of New York State, the vacancy rate in the nursing field was nearly nine percent in 2007. The Worker, Retiree and Employer Recovery Act is a federal law passed in December as an answer to the far-reaching decline in pension plans' value. This gives the union’s board of trustees (nurse representatives and employer representatives) the alternative to postpone for one year the alternative plans required by the Pension Protection Act. The board can decide until the end of the month. Nurses conducted rallies on March 5 outside the office of union’s Wall Street to insist to take the extension, and another rally will happen again this week. According to NYSNA numerous plans covered by the Pension Protection Act have adopted the extension. NYSNA’s campaign to extend the deadline doesn’t address the fundamental problem of the ailing stock market’s toll on the plan’s funds, according to Bruce McIver, president of the League of Voluntary Hospitals and Homes of New York. It only do delay in the time in which you have to make a choice to tackle those problems.

NYSNA pension plan is called defined-benefits plan paid by the employers. The plan has 70 percent of its assets are invested in stocks, but due to the recession, it lost more than a third of its value last year. Since then, many pension plans that have reserves in the stock market was found under funded. While officials from NYSNA to get the one-year extension, they believe that there will be no enough time for the pension to recuperate. These discussions need to continue to give us further time for planning, said Barbara Conklin, the senior associate director of the union’s Economic and General Welfare Program. [via]