A smart proposal to overhaul MBTA pensions

Passengers waited to board a Red Line train at Wollaston station.
Pat Greenhouse/Globe Staff/File
Passengers waited to board a Red Line train at Wollaston station.

TWO YEARS AGO, when an epic winter breakdown focused attention on the MBTA’s woes, Stephanie Pollack, the state transportation secretary, made a concise case for a deep fix.

“The T is the basis of the economy in metropolitan Boston,” she said, in an interview with the Globe. “No T, no economy.”

Memories of that winter are fading. But we shouldn’t forget what’s at stake — and we should seize opportunities to repair the Massachusetts Bay Transportation Authority when they arise. Brian Shortsleeve, the acting general manager of the T, has presented just such an opportunity, pitching a smart overhaul of the troubled $1.5 billion MBTA pension system.


His plan would reduce pension payments for retirees and require workers to serve longer to get the maximum benefit. T employees would no doubt feel the pinch. And policy makers should be cautious, in general, about curbing benefits for public employees in an era of mounting inequality.

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But the needs at the T are great, and the proposed cuts are reasonable. MBTA workers, after all, enjoy more generous pension benefits than other state employees.

As the Globe’s Adam Vaccaro recently noted in a story on Shortsleeve’s proposal, retirement benefits for teachers and most state workers are determined by multiplying years of service by an “age factor” that grows with time — from 1.45 percent for 60-year-old retirees to 2.5 percent for those over 67. For T employees, the age factor is 2.46 for all eligible retirees.

As Shortsleeve points out, that means there’s little incentive to work later in life. Under the current system, many can retire after 23 years on the job while more recent hires can retire at age 55 after 25 years of service.

T employees, unlike teachers and other state employees, are also eligible to collect Social Security on top of their pension benefits.


The Boston Carmen’s Union, Local 589, downplays the pension system’s drag on the MBTA’s budget. The T’s contribution to the pension fund accounts for about 5 percent of its operating budget, which is in line with other major transit agencies.

But the growing gap between the number of retirees and current workers, combined with mediocre investment returns, is creating a mounting strain on an ailing transit system that can’t bear it. Without change, the T predicts, it will have to pour an additional $1 billion into the pension plan over the next 18 years. That could ultimately mean a taxpayer infusion or fare hikes.

There is little reason to believe that the pension fund will right its own problems. It now operates as a private trust, and has faced withering criticism for its secrecy and failure to disclose investments gone bad.

Ultimately, the fund should shift its assets into the state’s larger pension fund — allowing for greater transparency and better investments. But in the interim, Shortsleeve’s proposed overhaul deserves a hard look.

Any proposed changes will probably have to be negotiated with the union, which has been sharply resistant to any reduction in benefits. The union needs to stand up for its members, but it also needs to see the bigger picture. If it doesn’t like Shortsleeve’s plan, it should propose something else that will rein in costs. And if the union refuses, the Legislature should intervene.


Fixing the pension system is one important part of fixing the T. And no T, no economy.