NARH Letter on Union Negotiations10-03-2007
It is time to put the negotiations between North Adams Regional Hospital and the Massachusetts Nurses Association into some rational context. There have been many inaccuracies and distortions published to date, which clearly do not serve to move us closer toward the outcome we all seek: a fair and mutually satisfactory agreement for both the registered nurses and the hospital so that we may continue to provide health care for the residents of this community.
NARH highly values its excellent nursing staff and fully intends to continue to provide competitive wages and benefits, including retirement, for these employees. Furthermore we recognize our obligation to continue to meet the healthcare needs for the northern Berkshire community, and assure its sustained financial viability in order to do so.
NARH is a small community hospital in the middle of a multiyear financial turnaround, and remains highly vulnerable. Recent figures for fiscal 2007 show a year-to-date operating loss of $735,000, a slight improvement over last year’s operating loss of $855,000 at the same time.
Registered nurses at NARH have a current base full-time salary ranges from $49,150 to $74,422. Actual earnings, including differentials and overtime, were as much as $134,661 in 2006. They work hard and deserve to be paid well. The total proposed salary increase now on the table, with wage and step increases combined, ranges from 4.55 percent to 8.15 percent per year depending on the nurse’s years of service. During the life of the three-year contract, registered nurses would enjoy total salary increases ranging from 14.26 percent to 28.16 percent depending on seniority.
NARH’s current retirement program, which combines a defined-benefit pension with employer-only contributions to a defined-contribution plan, must be transitioned, necessitated in part by the federal Pension Protection Act that now requires NARH to contribute an additional $1.2 million to $1.4 million per year to fund the pension. This would double our annual pension cost with no impact on the benefits earned by nurses. Other employers transitioned out of these types of plans many years ago. Under the existing plan, most registered nurses would retire with 85 percent to 92 percent of their last year’s earnings, well in excess of the industry norm of 60 percent. Some registered nurses would retire with a projected annual retirement income of 118 percent of their pre-retirement earnings. This includes the NARH pension, distributions from the employer-paid defined contribution plan, and Social Security.
The hospital has offered numerous alternatives. First, under any scenario, all benefits earned to date would be fully protected, and no employees 55 and older would see any change. One option is to transition the rest of the work force to the new defined-contribution plan, including a more generous match from the organization. The employee would contribute up to 2 percent, with up to a 3 percent matching contribution from NARH. Opportunities for greater matching contributions are available to registered nurses over 40.
In response to registered nurses’ stated preference to maintain the defined benefit plan, management has also offered that employees could increase their contribution to the defined benefit plan from 1.25 percent to 5.25 percent (reduced from the initial proposal of 6.25 percent) in order to fund the pension under the new requirements. Furthermore, the hospital was willing to explore, with the cooperation of the 1199 SEIU, extending the 1199 SEIU pension benefit to registered nurses. The 1199 SEIU pension offers excellent benefits, addresses NARH’s financial concerns, and requires no employee contribution. Both unions would remain entirely separate, but the pension would be extended to the registered nurses. MNA leadership immediately rejected this idea, without any explanation or discussion.
In the course of these negotiations, in addition to adding alternative options for the retirement plan, NARH has agreed to numerous concessions, including concessions related to mandatory overtime, health insurance, a modified wage scale (as proposed by the MNA), and use of sick time. This has been in the spirit of finding mutually agreeable resolutions to move us forward.
In the event that the registered nurses should choose to strike, NARH will be ready to maintain quality healthcare services for the community. We hope instead that we can come to terms that assure we are here to provide healthcare to the community not just for today, but for years to come. Let us come together to assure that we can.
Maria Basescu
Vice president of external affairs
Northern Berkshire Healthcare
Oct. 3, 2007
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