National Nurses United

Registered Nurse June 2009

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Pensions:1 copy 7/22/09 9:50 PM Page 12 defined benefit every month, no matter the state of the stock market when the person retires or how much the person was able to personally save. Under pension plans, employers pay into a pension fund, which is managed by pension administrators to ensure the growth, health, and long-term viability of that pot of money to fulfill the fund's obligations. In contrast, 401(k)s and 403(b)s are defined contribution plans, where the employee and sometimes the employer deposit what they can each paycheck into a retirement account. Though pension funds and retirement accounts are both typically invested in the stock market, employees with 401(k)s are expected to save and manage their own money, while employees with pensions do not. And of course, employees with 401(k)s are not guaranteed any set amount of income each month once retired. Pensions are usually calculated based on a formula which takes into consideration an average of the employee's salary during the final several years worked and the employee's total years of service. Up to the late 1990s, it was mostly only public-sector RNs with CNA/NNOC who enjoyed pensions. These included nurses working for the University of California system, county hospitals, and some healthcare district hospitals. These RNs could look forward to a retirement income that was guaranteed for the rest of their lives. RNs working for private-sector hospitals, however, lagged far behind. They typically had 401(k)s or 403(b)s, with an annual employer contribution of about 5 percent of their salary, with no assurance of what income that account would produce. "Nurses realized that they were getting older and they didn't have pensions and had to do something about it," said Lindsay. "So we hires are stuck with 401(k)s while existing employees get to keep their pensions. There's even a backlash among the general public, the vast majority of whom do not have pensions. Some buy into the faulty logic of thinking, "If I don't have a pension, then others shouldn't get one either," or blaming those with pensions for the current economic crisis. Unions such as CNA/NNOC have to constantly struggle to defend these critical retirement funds. So how are retired or soon-to-be retired nurses faring with their retirement situations? Registered Nurse talked to three RNs who have had very different experiences, and very different retirements. Social Security Is No Security McVay is the type of registered nurse who once insisted on riding along in the ambulance with a patient with a heart condition to make sure he got the care he needed. Her hospital did not want to admit him, and her supervisor had promised that they'd find a bed for him elsewhere. "I am going to make sure this person goes to that hospital and they don't just dump him somewhere," she remembered thinking. "Some hospitals, they don't want to treat people who come to their emergency room because they don't have insurance. Well guess what? That's too bad. That's what you have an emergency room for." But when she retired from that same Kaiser Permanente hospital in Martinez, Calif., where she'd worked for almost 20 years, suddenly she was the one who found herself in an emergency. She had no retirement funds and just $600 a month in Social Security. But she still had about $150,000 left to pay on her mortgage. McVay quickly found herself eating at home almost exclusively, wearing clothes till they "got a little short in the sleeve," and carefully calculating if she'd have enough for gas and food. —Kay McVay, RN and president emeritus of CNA/NNOC It was an unwelcome irony for a woman who, as a longtime activist and a past president of CNA/NNOC, adopted pensions as a bargaining priority as contracts came up for had dedicated decades of her life to improving conditions across the renegotiation. It was hard, but we were in a powerful position and got board for staff nurses—particularly in fighting for nurses' rights to what we needed." pensions. Her efforts ultimately helped Kaiser nurses win pensions, One of the first groups of RNs to achieve a pension once it was but not in time to benefit her. She retired in 1995. The pensions at her adopted as a bargaining priority in 1999 was those working for three hospital took effect in 2003. San Francisco Bay Area facilities owned by Catholic Healthcare "It was pretty bad. It was pretty bad," said McVay, now 75. "We West. Once pensions got a foothold, RNs were able to win them at just, you know, we had some money put away, but we used that up Sutter Health and Kaiser Permanente facilities. Today, RNs at all very rapidly. I'm glad I went back to work within two years, let's put it CHW, Sutter, UC, and Kaiser hospitals have pensions, and Lindsay that way." estimates that perhaps three-fourths of CNA/NNOC members have Now she makes enough to pay the bills, but she knows she can't this form of retirement security. Pensions are a goal for all CNA/ work forever. NNOC contracts. McVay spent most of her career working at a time when she was Despite their obvious advantages for workers, pensions are under barely making enough to live on; it wasn't until 1975 that she earned attack from all corners. Employers turn to bankruptcy or the courts more than $10 an hour. In addition to supporting her own family, to dump their pension obligations. Governments talk of eliminating she also supported her elderly father, who also lacked a pension, for pensions for public servants and adopting the 401(k) plans so popular 12 years. among private employers. In California, Gov. Arnold Schwarzeneg"When you're only making $10 an hour, you aren't making enough ger caused a public uproar in 2005 by floating the idea of converting money to consider saving for retirement," she said. "How are you state employees' pensions into 401(k)s, a change that would have going to save when you have two children you're raising when your devastated retirement for University of California RNs. He backed husband leaves you?" away from that proposal, but every so often has reintroduced the idea McVay firmly believes that nurses deserve pensions after spendand even recently proposed an unfair two-tier system where new ing their careers advocating for their patients. Today, she's proud "The only thing that upsets me is that so many younger nurses haven't got a clue how hard it was to achieve [pensions]." 12 REGISTERED NURSE W W W. C A L N U R S E S . O R G JUNE 2009

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