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Valley Medical plans changes to employee retirement plan
Editor's note: The second paragraph of the story now includes the provision that Valley Medical Center will make a 5 percent contribution to an employee's self-directed retirement plan, along with the 2 percent contribution to match an employee's 2 percent contribution to the retirement plan.
Valley Medical Center will change its retirement plan for its employees that it says will save millions of dollars for the hospital hit hard by uncompensated care, a move one union says violates the law.
The plan will end Valley’s traditional pension and instead the medical center will make a 5 percent contribution to an employee's self-directed retirement plan, plus match an employee's 2 percent contribution, among other new provisions.
For the two years ending on June 30, 2015, the new retirement plan will save the hospital about $12 million, according to Karyn Beckley, senior vice president for human resources and marketing.
“We believe we have developed a great contemporary retirement program, at the top of the market, which will help you plan for a secure retirement,” Rich Roodman, Valley Medical Center’s CEO, wrote in a letter to employees this week.
But the largest union at Valley Medical, the Service Employees International Union, Healthcare 1199 Northwest, has raised concerns about the retirement plan, maintaining labor law is violated.
Three SEIU contracts at Valley Medical also expire on June 30, 2015.
Valley Medical Center has about 2,900 employees, approximately 2,100 of whom are represented by one of four unions at the hospital. SEIU represents about 1,400 Valley employees.
The plan will go into effect on Sept. 29 for non-bargaining-unit employees and on Oct. 27 for physicians who are employed by the hospital.
Hospital staff has met with hospital employees at several forums to explain the new retirement plan.
Valley Medical Center has sent letters to the four unions, asking to begin talks about implementing a new retirement plan, possibly the one now available to non-union members.
Beckley indicated that Valley Medical is not asking that the unions reopen contract negotiations. However, she pointed out that Valley Medical Center has the contractual right to terminate the retirement plans with the unions.
“I would say that it is our goal and our desire for all of our employees to have a top-tier retirement program,” Beckley said.
The hospital wants to preserve jobs, but at the same time is facing financial challenges, including the cost of health-care reform and absorbing the millions of dollars in costs not covered by insurance, known as uncompensated care.
Valley Medical has not updated its retirement plan since 1967.
Diane Sosne, president of SEIU Healthcare 1199NW, said in a statement Wednesday that nurse and health-care workers are proud to work at Valley Medical and provide quality patient care.
“We are surprised Valley Medical Center would violate labor law to unilaterally implement a change to the pension,” she wrote.
She suggested that “collaborating to successfully implement the Affordable Care Act is the best way to meet the healthcare needs of our community.”
“Heavy handed maneuvers are out of character with this employer and we think violating signed contracts with employees is not in the best interest of patients who utilize this hospital,” she wrote.
She pointed out that the union and Valley Medical have worked in the past to meet challenges, “and we would expect to do so going forward.”