MBTA boosts pension benefits amid hiring difficulties
The MBTA agreed to a more generous pension agreement with its largest union, to bolster hiring efforts and retain employees at the struggling agency.
Ahmad Barnes, the T’s senior director of labor relations, said the arbitration decision this fall, which would have raised the retirement age from 55 to 65, was ultimately spiked because it was seen as “detrimental to the Authority’s hiring efforts.”
“The (arbitration) award essentially reduced employee benefits,” Barnes said. “That will require all employees to work until age 65, essentially zeroing out current benefits for employees.”
Barnes said the $150,000 compensation cap in the arbitration decision, which was challenged by the Boston Carmen’s Union Local 589 in court, was also “critical,” in terms of factors that made the award unappealing to both sides.
The new pension agreement, approved by the MBTA Board of Directors late this week, allows employees to work for a shorter period of time — 10 years rather than 25 — to reach retirement eligibility at age 55.
It also increases the retirement benefit maximum from 75% to 80%, based on a formula that uses the average of an employee’s three highest years of compensation.
Employees who work for 10 years at the T, but leave before becoming eligible for a normal retirement allowance, will have their pension compensation deferred until the month after their 65th birthday.
Current benefits require 25 years of service for employees hired after Dec. 6, 2012, to retire at age 55. Workers hired before that date were grandfathered into the controversial “23-and-out” policy, outlawed by the Legislature in 2009, which allowed for a slew of early retirements.
“From a retention perspective, one of the things that we were trying to achieve is to provide goals or better benefit packages for employees to make it worth staying longer,” Barnes said.
He said increasing the maximum retirement benefit to 80% serves as more of an incentive to employees currently at the agency, as it applies to workers hired before the date of the new agreement, effective April 30.
Barnes said the “10-year vesting schedule is going to be attractive for many of the vacancies” the MBTA is trying to fill. Requiring employees to work for 25 years before becoming eligible for normal retirement benefits at age 55 may have deterred the older candidates the agency was trying to recruit, he said.
The agreement also allows up to 125 retirees to return to work at the MBTA, who will essentially be taking in a salary while also collecting a pension.
It covers the retroactive period from July 1, 2018, to June 30, 2028.
from Boston Herald https://ift.tt/wWkEt5h
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