Union officials sue MBTA after arbitrator proposes slashing pensions of those who retire before age 65

Link: https://www.bostonglobe.com/2022/09/26/metro/union-officials-sue-mbta-after-arbitrator-proposes-slashing-pensions-those-who-retire-before-age-65/

Excerpt:

The MBTA’s largest union is challenging an independent arbitrator’s decision that would reshape the rules of the authority’s $1.66 billion retirement system, including slashing the pensions of those who retire before the age of 65.

…..

Still, after more than four years of negotiations over a pension agreement, it’s unclear what exact changes could come to the MBTA’s retirement fund, where the number of retirees has long outpaced the amount of workers paying into it, and MBTA officials have long pressed for sweeping changes.

As of the end of last year, the fund’s unfunded liability hovered at more than $1.3 billion, and, despite changes that went into effect a decade ago to stem what were considered lavish retirement perks, younger retirees have continued to flow into the retirement system, creating more financial pressure.

….

The arbitrator’s decision included a series of changes, most notably in lifting the age at which a retiree would collect an “unreduced” pension. Under the ruling, workers who opt for early retirement — in this case, before the age of 65 — would have 6 percent deducted from their pension benefit for every year of retirement before the age of 65.

Currently, anyone who is 55 and has at least 25 years of service qualifies for a so-called normal monthly pension, calculated at 2.46 percent of the average of a person’s three consecutive highest-earning years, multiplied by years of service.

Author(s): Matt Stout

Publication Date: 26 Sept 2022

Publication Site: Boston Globe

Providence voters back $515m pension bond in low-turnout election

Link: https://www.bostonglobe.com/2022/06/07/metro/providence-voters-back-515m-pension-bond-low-turnout-election/

Excerpt:

Fewer than 3,600 city voters on Tuesday backed Mayor Jorge Elorza’s proposal to borrow $515 million to shore up Providence’s ailing pension fund, according to unofficial results from the Board of Canvassers.

But even fewer voted against the bond.

In a special election that saw just 4 percent of the Providence’s 124,000 registered voters participate, the $515 million pension obligation bond won approval by a wide margin, with 70 percent supporting the proposal.

The plan still needs to be approved by the state Senate, but Tuesday’s vote dramatically increased the likelihood that Providence will be allowed to borrow $515 million and deposit the proceeds into the retirement system to invest.

Elorza has said the infusion of cash from the bond will allow the city to stabilize its pension fund, which has just 26 percent of the $1.6 billion it needs to pay current and future retirees over the next several decades, according to the city’s financial records.

Publication Date: 7 June 2022

Publication Site: Boston Globe

COVID rescue package gives failing pension plans a $86 billion bailout, stirring hope and criticisms

Link: https://www.bostonglobe.com/2021/03/13/nation/covid-rescue-package-gives-failing-pension-plans-86-billion-bailout-stirring-hope-criticisms/

Excerpt:

In the shadow of stimulus checks and extra unemployment aid, Democratic lawmakers extended another hand in the $1.9 trillion pandemic relief package: a long-sought bailout for failing private pension plans.

The union-backed provision, touted for years by Representative Richard E. Neal, was signed into law Thursday by President Biden as part of the larger COVID-19 stimulus bill. It promises to set aside an estimated $86 billion — and some say possibly far more — in grants for multi-employer retirement plans that were careening toward insolvency even before the pandemic hit.

Without it, the multi-employer pension plans for more than a million truckers, warehouse and retail workers, and others could collapse, unions and congressional Democrats warn. In New England alone, the measure could help preserve the promised retirements of at least 70,000 Teamster members, union officials said.

Author(s): Matt Stout

Publication Date: 13 March 2021

Publication Site: Boston Globe