At the same time Sun Health is also beefing up its 401(k) plan, the Arizona Republic newspaper reported. The newspaper did not include details on the 401(k) changes.
“The change we made aligns us with a majority of other health care providers in the Valley,” said Lee Peterson, chief executive officer of the 4,500-employee Sun Health system. “We need to make a change to continue to be nimble in the market, and we need to be competitive in costs.”
The newspaper said the company stopped its pension plan for new employees in 2004 with workers coming onboard since March 2004 able to enroll in the 401(k).
Peterson said the health care network will save up to $2.5 million each year by freezing the pensions – money the health care provider expects to use to recruit and retain employees in the competitive health care field.
According to the news report, existing retirees and current workers 55 years old or older with at least 20 years of service will not be affected by the changes.
Employees who are not grandfathered in under the pension plan but nevertheless are nearing retirement age or have been with Sun Health for a long time will be offered an accelerated 401(k) savings plan.