As part of offering a Total Rewards package that is both competitive for employees and sustainable for the organization, Butler is proposing that current Butler employees continue to participate in the current pension plan with no changes. New employees hired after 12/31/2025 would then be enrolled in a 403(b) retirement plan with a 6% company match in lieu of participation in the current Butler pension plan. Here are some important things to know about this proposal:
1. There will be no changes to the pension for current employees.
Current employees already in the plan retain their pension benefits as earned and accrued. Your benefits will grow in the future, as they always have, with additional service time as a Butler employee. No one is losing what they’ve earned, and every employee eligible for the pension today will continue to have the opportunity to allow the benefit to grow.
2. The Butler pension plan remains financially strong.
It is currently 90% funded, which is considered healthy and stable by industry standards.
3. Closing the pension to new entrants will have no negative impacts to the current or future security of the plan.
Unlike some multi-employer retirement plans that cover union members, our pension is not dependent on new employee contributions to remain solvent. According to Willis Towers Watson, an independent expert in employee retirement plans, closing the plan to new entrants actually protects the plan’s long-term health by limiting future liabilities and keeping current obligations stable. Butler is required by federal law to continue to fund pension benefits for all participants covered by this plan.
4. Employees hired in the future will enjoy a competitive retirement savings plan.
The 403(b) plan with a company match Butler is proposing will put new hires in control of their retirement saving. Workers increasingly prefer the flexibility, portability, and personalization consistent with modern defined contribution retirement plans. They have a shorter vesting schedule than pension plans, allow them to take their retirement savings with them if they change employers (changing employers during the course of a career is much more common for younger workers), enable them to designate beneficiaries for their entire account balance, and customize their investments (for example, take more risk if they desire) in order to align with their financial goals.
While the structure is evolving, our commitment to employee retirement security remains strong. Many hospitals and health system employers have transitioned new hires to defined contribution plans (like 403(b)s) while preserving pensions for current employees. This keeps organizations competitive and financially sustainable while honoring existing commitments to their employees.
