Tisa Kosbab, an intensive-care nurse at Swedish Medical Center, earns nearly $38 an hour, pays no medical-insurance premiums and is accruing a pension that ranks as the most generous among all Puget Sound-area hospitals.

It's no wonder Kosbab gladly makes the daily 50-mile round trip from her Auburn home to Swedish's First Hill campus in Seattle.

People who work at Swedish "absolutely are there because of the pay and benefits," said Kosbab, a 20-year employee. "Swedish sets the gold standard."

But Swedish — the Northwest's largest hospital system — says it no longer wants to be so golden.

Saddled with pension costs that it says are double its peers' and alone among area hospitals in providing premium-free health coverage, Swedish wants to save tens of millions of dollars a year by changing its benefits plans.

The hospital system is negotiating with its largest union to freeze its guaranteed pension benefits and switch workers to 401(k)-like plans in which workers manage their own retirement investments. Swedish also wants its workers to pay as much as $1,200 in annual health premiums to cover family members — something its competitors already require.

Swedish, which operates three hospitals in Seattle and an emergency room and specialty center in Issaquah, argues that its 1960s-era pension program is anachronistic and expensive. Swedish says it must make changes now to avoid the same fate as United Airlines, whose $9.8 billion pension default will leave some retirees with less than half the money they had been promised. And Swedish contends that its employees still would have one of the better health plans around, even with new premiums.

Hourly pay at Swedish


Registered nurses: Starting pay: $22.35; top rate: $40.13

Unit secretary: Starting pay: $13.57; top rate: $18.92

Transcriptionist: Starting pay: $14.90; top rate: $20.44

Housekeeper: Starting pay: $11.18; top rate: $16.40

Pharmacy technician: Starting pay: $10.65; top rate: $20.73

Source: Service Employees International Union Local 1199NW

But the plan is drawing anger and opposition from union members, who say it would hurt Swedish's status as the premier hospital employer. To show their displeasure, nearly 4,500 nurses, housekeepers, secretaries, pharmacy technicians and other members of the Service Employees International Union (SEIU) Local 1199NW are voting this week on what Swedish has proposed so far. Swedish says it's still negotiating with the union and hasn't made a final offer.

The union will release the vote tally Monday, along with details of an "action plan" to publicize its issues.

Three SEIU bargaining units at Swedish are working under contracts that don't contain final agreements on pension and health benefits. The union and the hospital system deferred negotiations on those issues until now.

The impact from any changes would go far beyond SEIU members. Swedish says the proposed retirement changes and health premiums would apply to most of its 7,000 employees, including staff doctors and other nonunion workers.

Ron Sperling, Swedish's chief financial officer, said the hospital system wants to continue attracting the best workers by paying top dollar — but just not so much.

"We're fine being on the top end, but we can't be so far ahead of everybody else," Sperling said. "Health care is a really competitive business. And if we're not, our future sustainability as an organization is in question."

Swedish, which is nonprofit, earned $130 million in net income between 2002 and 2004. Sperling said revamping Swedish's pension plan could cut by half the company's $36 million in annual pension contributions within a decade.

"The time to deal with this is now," he said. "Let's not wait and turn ourselves into United [Airlines]."

Swedish's current pension plan was created in 1968, a time when workers were expected to — and did — stay with the company for 30 years to collect their full retirement benefits. But Sperling says that doesn't work well for today's workers, who hop from job to job — often before they become vested in their pension plans.

Instead, Swedish is proposing to chip in 4.5 percent of an employee's gross pay into individual retirement accounts. On top of that "base contribution," workers also would have the option of putting in 4.5 percent of their pay. If they do, Swedish would match 50 cents for every dollar put in by the employee. The workers would decide how to invest the money.

The SEIU warns that Swedish's plan would jeopardize retirement security for many workers, particularly those who earn the least.

Shirley Sims, a 10-year unit secretary who makes $17.57 an hour, said setting money aside for a retirement fund simply isn't an option for some.

"You have to have money to put into it," said Sims, who is a member of the SEIU's contract-bargaining team.

What's more, an employee who leaves Swedish after less than five years would forfeit the company's base contribution.

In the past two decades, the number of U.S. companies with traditional pensions has shrunk by 75 percent. But workers' own saving for their retirement is anemic at best. Half of the people near retirement age have $10,000 or less in their 401(k)-type plans or Individual Retirement Accounts, according to The Pew Charitable Trusts, which is spending nearly $4 million to promote personal retirement savings. And studies have shown that many workers make poor or too conservative investment choices with their retirement accounts.

Sperling said Swedish's pension costs are more than double what nine peer hospitals spend on average. Its health-care costs are about 40 percent higher. Swedish employees now do not pay monthly premiums, but they have $500 annual deductibles for family coverage and co-pays for doctors visits.

Swedish wants employees to start paying $36 a month for individual coverage and up to $101 for families. The premiums would increase each year until 2008. Sperling estimates the premiums would save Swedish $3 million a year.

Diane Sosne, president of SEIU Local 1199NW, said Swedish shouldn't compare itself to other hospitals, some of which are far smaller. Sosne said Swedish's pay and benefits have been valuable recruiting tools for the company, which it can ill afford to lose at a time when nurses are in short supply.

"They are not a peer hospital. They're in a league of their own," Sosne said. "I really think Swedish needs to re-evaluate" its plan.

Kyung Song: 206-464-2423 or ksong@seattletimes.com