Jun 26

MBTA wants to take an ax to retirement benefits

Boston Globe | By Adam Vaccaro | June 26, 2017

Future MBTA retirees would receive reduced pension payments and would have to work longer to earn the maximum benefit under a proposal to be unveiled at the transit authority’s board meeting Monday.

James O’Brien, president of the Boston Carmen’s Union, Local 589, which negotiates the pension contract, responded to the proposals by criticizing Shortsleeve as being more focused on “bean counting” than on improving service on trains and buses.

The T’s contribution to the pension fund is about 5 percent of its operating budget, O’Brien said. That compares favorably with other major transit systems, according to an economist working for the union.

“If he can’t pay my members a pension, he can’t pay for anything at the T,” O’Brien said.

As it works to find savings to fund service improvements, the T has stepped up its criticism of the $1.5 billion pension fund.

Officials say that the fund is financially unsound because of the increasing disparity between the number of retirees and current workers, and that its middling investment returns over the past three years have not helped.

With no changes, the plan could need an additional $1 billion over the next 18 years, according to the T.

The union disputes that forecast.

O’Brien has argued that Shortsleeve is overstating the fund’s troubles by projecting overly pessimistic returns of about 4 percent in coming years….

O’Brien also criticized Shortsleeve’s plan to deduct pension pay based on Social Security benefits.

“He’s taking Social Security away. Let’s call a spade a spade,” O’Brien said. “I don’t know why he preys on the most vulnerable people, which is senior citizens.”

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Permanent link to this article: http://carmensunion589.org/2017/06/mbta-wants-take-ax-retirement-benefits/

2 comments

    • Murphy on June 27, 2017 at 12:50 pm

    First let me preface my remarks by saying I do not want to see any retiree, present or future, have their benefits reduced. We, as employees of the MBTA, met our part of the bargain now it’s time for retirees to get what we bargained for. This notion put forward that retires receiving social security should have their MBTA pensions reduced smacks of the “old divide and conquer” used against the working class for hundreds of years. Pitting one group of retirees against another. In fairness to ALL RETIREES the pain of unwarranted pension cuts must be shared equally between all. Asking senior citizens to be the only folks to take a pension benefit cut, in some cases $11,000 a year, is simply not fair.

    • Kennedy on June 27, 2017 at 12:02 am

    Here we go again! Half truths and misinformation are once again in play in order to do away with middle class MBTA jobs and pensions. Interesting to note that Mr. Shortsleeve fails to mention that the hard working men and women at the MBTA are mandated to pay a 7.5% social security payroll tax, unlike teachers and state workers, and therefore should be rightfully entitled to social security benefits. Moreover, teachers and state workers are better able to supplement their pensions with 457 plans due to not having to be burdened with a weekly mandated 7.5% social security tax. Towards this end, MBTA employees after this mandated social security payroll tax have little money left to invest in a 457 Plan to supplement their pension, as teachers and their state counterparts do. Furthermore, Mr. Shortsleeve fails to mention that an MBTA employee after 23 years of service is only eligible for a partial (55%) pension. To be eligibl for a full pension (75%), an MBTA employee has to provide just under 31 years of service. Teachers, state employees, and municipal employees have to serve between 30 to 32 years to become eligible for an 80% pension. And let’s not also forget, Governor Patrick’s MBTA Pension Reform in 2009, which now requires employees to be at least age 55 and have at least 25 years of service in order to be eligible for a partial pension. The government under FDR instituted a series of government programs, known collectively as the New Deal, that aimed to restore some measure of dignity and prosperity to many Americans. These programs led to the emergence of the middle class. Yet somehow Mr. Shortsleeve irrationally feels the hard working men and women at the MBTA, who for decades payed into social security, should be penalized for receiving these hard earned benefits later on in life. I do hope the working class party–The Democratic Party–will remember its long alliance with organized labor and how this great alliance created the middle class and be ready to protect middle class jobs and pensions!

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