Posted by Facing a crisis in its pension fund, 1199, New York’s giant health care union, reached an innovative settlement on Monday that calls for forgoing nearly a billion dollars in raises for 145,000 union members so that hospitals can increase their pension contributions to safeguard future retirement benefits.
The union, formally called 1199 S.E.I.U. United Healthcare Workers East, agreed to a wage freeze for next year, but also — in a move that parallels Mayor Michael R. Bloomberg’s proposal for municipal employees — accepted less generous pensions for future hires.
With the union’s pension fund losing $3.5 billion — or one-third its value — in recent years, mostly because of losses in stock market investments, 1199 feared that the fund would have to reduce promised pension payments to not only 48,000 current retirees, but also tens of thousands of current workers.
