More than one in every five MBTA pensioners retired before age 50 as the state increasingly has to pick up the tab on the T’s troubled pension fund that’s running big deficits even in the current strong market, a Herald analysis shows.
“It’s a few retirees who are being subsidized by the Massachusetts taxpayers,” said Mark Williams, a Boston University finance professor who tracks the MBTA Retirement Fund. “They’re eating two bites at the apple, plus they get to work at another job.”
That’s referring to the situation caused by the T’s longstanding “23-and-out” policy, which didn’t put a retirement age on its workers — it just required 23 years of service, at which point they could grab the pension, eventually become eligible for Social Security, and pick up another gig at the same time.
That’s what led to 22% of the 5,626 people receiving T pensions having cashed out under age 50, according to a review of MBTA Retirement Fund data. The average T pensioner is 55.8 years old.
The retirement fund has floundered deeper into fiscal danger, last year reporting $2.91 billion in liabilities versus $1.45 billion in assets. The fund said no new data is available about that breakdown at this point. It falls on the state to fill the annual shortfall, which resulted in the MBTA budgeting $118.2 million to keep the retirement fund afloat for the current fiscal year. That’s up from $102.9 million in fiscal year 2019 and $93.8 million the previous year. That’s now more than half of the total yearly payout, which is upward of $201 million, per the data.
Read the whole article in the Boston Herald.
This article quotes selections from “One in 5 MBTA pensioners is younger than 50 as fund struggles” by Sean Philip Cotter in the Boston Herald.