T’s youthful retirees costly to taxpayers and riders

Next time you’re stuck on a stalled Green Line train, hoping against hope to get to work on time on a system crying out for more investment, here’s an amusing statistic to contemplate: Some 200 MBTA workers retired last year and began collecting their pensions, a third of them under the age of 55 and two-dozen of them in their 40s.

If that isn’t enough to raise the blood pressure, throw in the fact that on July 1, riders will have to come up with another $29.5 million (that translates to an extra 15 cents for that Green Line ride) to help cover the T’s “structural deficit.” Two of the chief components of that deficit are debt service (about $160 million in the past year) and pensions, where the state contribution hit $103 million this year and will continue to climb.

Now we know why.

The T’s pension system has always been separate from that of other state workers — with its own rules and regulations. For many years it operated on a “23 and out” system, meaning workers could collect a pension and free health care after 23 years on the job, regardless of their age. The rule made for some rather young “retirees,” who even now are collecting lucrative pensions while in their prime and ready to start a new career.

The 2018 crop of retirees, according to records obtained by a Globe request, include a 47-year old now getting a pension of $63,406 a year and a 48-year-old with a pension of $60,353.

The system was changed for those hired after Dec. 6, 2012, to a still generous but more reasonable rule requiring employees to work 25 years and reach age 55 to qualify for a pension, but that still leaves a fair number of 40-somethings grandfathered in under the old rules.

By contrast, other state employees and teachers aren’t eligible for pensions until they reach age 60, and that’s with 25 years on the job. Teachers get less than 40 percent of their ending salary; MBTA employees average about 60 percent of their last year’s salariy.

Meanwhile the T’s pension system — which has more people collecting pensions (5,600) than currently working for the agency (5,300) — is on an unsustainable path. Union officials point out that T management had offered incentives for retirements and replaced some T staff with contract employees in recent years. Still, in fiscal 2007 the MBTA — and its riders — contributed $30 million into the pension fund, compared with $103 million this year. T officials warn that the figure could hit $137 million within the next three years.

The other looming issue is the pension system’s unfunded liability — the difference between what retirees are owed and what is actually in the retirement fund. By the end of 2019 that figure is expected to reach $1.5 billion. The privately run system has been underperforming that of the larger $70 billion Pension Reserves Investment Management Board, which covers pensions for nearly all other state workers and public school teachers.

In fairness to taxpayers and riders — and, yes, even to MBTA workers — this just can’t go on forever. But the powerful Boston Carmen’s Union Local 589, the largest of the T’s collective bargaining units, has dug in its heels over negotiating anything that hints of reform — including a possible sliding scale for pension rates that would provide an incentive for workers to stay on the job.

A few lawmakers have, however, found the courage to at least look at the issue. Representative William M. Straus of Mattapoisett, House chair of the Transportation Committee, is proposing a commission to study the impact of moving T workers into the larger state system. A 2017 law would allow — but does not mandate — the PRIM board to manage the investments of the MBTA pension system.

Frankly we’re not sure how much there is to “study,” but if the proposed commission can be a vehicle for making that transfer happen and for bringing the T pension system rules in line with the rest of the state system, then it simply can’t happen soon enough. Riders and taxpayers deserve no less.