This afternoon, Boston Carmen’s Union President Jimmy O’Brien testified before the MBTA Fiscal and Management Control Board about the Massachusetts Bay Transportation Authority Retirement Fund (MBTARF).
FMCB Testimony – MBTARF
Jimmy O’Brien, Boston Carmen’s Union
May 22, 2017
While the members of this board know that I am a board member of the MBTA Retirement Fund, I do not speak for the Board or the Fund unilaterally.
I am here to give voice to the members of the Boston Carmen’s Union, Local 589, both retirees and current contributors.
It’s disappointing to stand here this morning, in defense of the pension – a pension MBTA employees were guaranteed, and one that they have earned. For a lot of MBTA employees – their jobs are not easy.
It is impossible to stand here today and not mention that one of our members was violently attacked this weekend. Bus drivers and train and trolley operators have some of the most difficult jobs. Believe me, they earn not only their paycheck, but their pension as well.
And, it’s disappointing, once again, to hear MBTA leadership throw a bunch of numbers around with the goal of sowing fear among pension holders. A similar effort seems to be underway to do the same with members of the state legislature.
I’m reminded of that famous quote about lies, damn lies, and statistics.
The MBTA again presents carefully selected statistics in an attempt to justify its goal of cutting the amount of money MBTA retirees will have to live on.
The means of doing this is to disparage the MBTARF and say it is performing badly.
But that’s simply not the case.
The truth is the 30 year average return for the MBTARF is over 9.00%.
The five year average return is over 8.00%.
The MBTA projects a 4% return over the next 10 years to scare people. Why else present a figure that does not accurately reflect the historical returns of the Fund?
Since 2015 the MBTA through layoffs, privatization, and retirement incentives, has experienced 728 retirements. At $80,000 per employee a year in wages and over $20,000 in pension and social security payments, the MBTA has transferred more than $72 Million in payroll costs to the pension plan.
As a result of that shift, the MBTA’s Pension Contributions have increased, but an honest review must look at both sides of the ledger—while pension contributions are up, the shift has reduced MBTA payroll by $61.5 Million since 2014.
The biggest challenge facing the MBTARF is that the MBTA has continually reduced the workforce, for decades, so there are more retirees that contributors. But MBTA leadership has been asleep at the switch, and failed to plan to manage the imbalance its workforce reductions have caused.
MBTA employees provide a public service.
Our contract promises a pension upon retirement, a pension that will allow us to retire, care for our families, and live our lives.
The General Manager—and the Pioneer Group, among others—often talks about our pensions as if we will be spending retirement sailing yachts in the Mediterranean.
The reality is that our pensions will allow hard working men and women to live with dignity, to enjoy their retirement.
At a time when the Federal Reserve says more than 50% of Americans will not have enough money during retirement to maintain their standard of living, why would the MBTA and Governor Baker want to weaken the safety net for these public servants?
The state MBTA warns it may no longer be able to honor the promises it made its employees.
Where I come from, a promise is a promise.