Letter: Doom and gloom over MBTA’s pension system is an overreaction

Below is President O’Brien’s letter to the Boston Globe’s editors in response to their recent story about the MBTA’s pension fund. It was printed in today’s paper.

James O'Brien

March 04, 2019

Re “MBTA woes can’t be cured without pension reform” (Editorial, Feb. 25): No one wants the Massachusetts Bay Transportation Authority’s pension fund to succeed more than the MBTA workers who do — and will — rely on it for their retirement benefits.

There is one simple reason why the MBTA Retirement Fund requires an intense period of funding: a significant reduction of full-time employees. In 1991 and again in 2016-17, the MBTA offered incentives to workers to persuade them to retire. It worked. The MBTA enticed more than 1,000 workers to retire. In addition, the MBTA replaced almost 1,000 full-time workers with contract labor over the past 20 years. Those two actions reduced the MBTA’s payroll by $92.8 million.

At the same time, by creating more than 1,000 new retirees, the MBTA increased its pension benefits cost by $79.7 million. And by replacing full-time employees with contracted services, the MBTA reduced the number of workers contributing to the pension fund, while still paying for the work to get done.

Workers and the MBTA contribute to the pension fund based on a formula, not happenstance. When employment levels decrease, there are fewer workers who pay into the fund than retirees who draw from it, and contributions from the remaining workers and the MBTA increase. Workers have doubled their contribution, and the MBTA had to increase its commitment as well.

Under current contribution levels, the retirement fund is forecast to be fully funded in 20 years. At that point, demand for funding from both workers and the MBTA should be half of what it is today.

MBTA workers and retirees deserve sober discussions about their pension fund, not projections designed to sow fear.

Finally, I hope the Globe’s editorial writers appreciate the power of their words. Comparing a stable pension fund to a Ponzi scheme is reckless and disregards the truth.

James O’Brien, President

Boston Carmen’s Union, Local 589

Permanent link to this article: https://carmensunion589.org/2019/03/letter-doom-and-gloom-over-mbtas-pension-system-is-an-overreaction/

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