Imaxshift.com – Revamped Pension Benefits at MBTA Aim to Boost Staff Retention and Attract New Talent.
The MBTA is implementing strategies such as sign-on bonuses and other benefits to fill numerous job vacancies within the organization. It’s also enhancing its pension plans to better incentivize existing employees, draw in new hires, and even encourage retirees to return to work.
This measure, necessitated by a significant worker shortage at the T, marks a shift from the agency’s previous efforts to control what was criticized as overly generous retirement benefits.
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On Thursday, the MBTA board sanctioned a fresh pension arrangement with the Carmen’s Union. This arrangement supersedes the arbitration ruling from last year, which was not well-received by union members and was believed by T officials to potentially deter new hires and hasten retirements of current staff.
The fresh agreement enables as many as 125 retired individuals to resume part-time work at the MBTA, while continuing to receive their pension and other retirement benefits.
Moreover, the arrangement raises the ceiling on the yearly retirement allowance from 75% to 80% of the employee’s top three highest earning years. It also offers any union member who has served at least 10 years the option to take early retirement with a fully vested pension, activated at 65 years of age.
Ahmad Barnes, the MBTA’s Senior Director of Labor Relations, stated that a “10-year vesting schedule is likely to be appealing to many potential candidates for the vacancies we’re attempting to fill.”
Another significant shift includes directing 50% of the MBTA pension fund assets into the state pension fund, recognized for its superior investment performance and lower costs.
This transition, as projected by the MBTA, could lead to substantial annual savings and improved outcomes. As shown in the MBTA board presentation, the T’s pension fund carried an unfunded liability of $1.3 billion at the close of 2021.
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