A new 401(k)-type retirement program will replace the current pension plan for employees of Lawrence Memorial Hospital effective April 1.
Unlike the old plan, the program will allow for employee choice of investments.
"What we had was a defined-benefit program that was designed in 1974. Things have changed since then," said Deborah Thompson, the hospital's vice president of human resources.
"We're doing this to remain competitive with other health-care organizations in Kansas City and Topeka, and because people have asked for it very clearly in our employee survey," she said.
LMH's board of trustees approved a transition to the new retirement program during its regular monthly meeting Wednesday.
Under the pension plan, employees receive a defined amount of money each month after the age of 65, depending upon length of service at LMH.
Pensions of those already retired from the hospital will not be affected by the change.
There is about $16 million in the pension fund now. Money employees already have earned under the old plan will be re-allocated to them under the new program.
The new plan will include any employee who works more than 1,000 hours per year at LMH. That's about 800 people, according to Thompson.
The change gives employees more investment options.
"It's an improvement for us because LMH will be matching up to a certain percentage of the amount the employee can voluntarily deposit, and we can roll over any eligible funds from other plans (such as the pension)," said Libby Smith, a registered nurse who works in LMH's intravenous therapy department.
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