Sutter Health Contributes $400 Million to Employee Pension Plan
Pension Plan Among Top 10 Highest Funded Nationwide Among Not-For-Profit Health Systems
Sutter Health announced a contribution of $400 million to the Sutter Health Retirement Plan to support more than 45,000 employees upon retirement and to keep the network’s pension plan fully funded.
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In 2011, Sutter Health’s consistent record of significant pension plan contributions was recognized by Standard & Poor’s, with the credit agency noting Sutter’s employee retirement plan as among the reasons it upgraded the not-for-profit network’s credit rating to AA- in January. Sutter Health also was named by Standard & Poor’s as one of the top 10 highest funded defined-benefit pension plans nationwide among not-for-profit health care providers.
According to a report by Standard & Poor’s, “many not-for-profit hospitals and health systems continue to grapple with pension costs.” Agency Director Liz Sweeney also discussed Sutter Health’s credit rating upgrade and the implications of funding declines among many not-for-profit health system pensions in a “Credit Matters” broadcast segment produced by Standard & Poor’s.
The Employee Benefit Research Institute (EBRI) conducted a retirement confidence survey in 2011, finding that “Americans’ confidence in their ability to afford a comfortable retirement has plunged to a new low.” The EBRI also reported that “the traditional pension plan is disappearing. In 1980, some 39 percent of private-sector workers had a pension that guaranteed a steady payout during retirement. Today that number stands closer to 15 percent.”
“At a time when companies are downsizing or eliminating employee pensions, Sutter Health has made funding our pension a top priority,” said Pat Fry, president and CEO of Sutter Health. “Employees deserve to know that when they retire, the money they worked so hard for will be there for them.”
“Employees are the ones who make health care happen. It isn’t the buildings, it isn’t the equipment – it’s the employees that actually utilize those things,” said Gerry Brinton, chair of Sutter Health’s Board of Directors. “Providing a generous pension is just one way Sutter recognizes and rewards the skills and abilities of employees who choose to work for our network.”
By the Numbers | Sutter Health’s Pension Plan and Benefits
- In the Sutter Health network, a 52-year-old nurse working full-time who retires in 2024 at age 65 can expect to receive about $7,000 per month or $84,000 per year at retirement from the Sutter Health pension plan (not including possible income from investment in a 403(b) plan or from Social Security.)
- Sutter Health’s pension is one of many employee benefits, including health insurance at low or no cost, paid time off, education assistance, 403(b) plan, and a retiree health care account at many locations.
- Sutter’s retention rates for employees and registered nurses within acute care facilities ranks better than the California average. Sutter’s retention rates among registered nurses for 2010 stood at 95 percent compared to 93 percent statewide, as reported by the California Hospital Association.
- To keep the employee pension plan fully funded, the not-for-profit health system invested $120 million in plan year 2010 and $500 million in 2008.