MBTA Pension Brouhaha

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Today’s Globe has a brutal piece on the MBTA’s pension plan and the unbelievable payouts it generates. One of the highlights is former MBTA General Manager Michael Mulhern’s payout. He retired as GM several years ago and got the proverbial soft landing as head of the T’s pension plan. At age 48, he collects a pension of $130,000 and a salary of $225,000.

The T’s plan does this because it has many of the crazy features of the other public pension systems (read more about those here) plus it has no minimum age feature, so folks can retire as soon as they get their 20 years in, even if they are in the prime of their careers.

To add insult to injury, the MBTA’s plan is unlike any other public pension system in the state and is a contractual creature of collective bargaining. So there’s no oversight or disclosure of their activities.

Before we raise the gas tax/increase tolls/raise more revenue, let’s get the T’s financial house in order.

  • j cat

    the MBTA retirement fund is very much unlike the other state retirement funds….this is so true…as you have stated.

    you have conveniently omitted the fact that this fund is private, that any changes must be voted on by the members, and this fund is solvent and fully funded….

    the reason this fund is in this state of solvency is because the politics of massachusetts is not allowed to steal the funds deposited as the other funds have been raided and poorly managed…

    The state leaders should model the other state and municipal retirement systems to that similiar to the MBTA…..then you have a pension plan that will insure the security of its workers and provide no loss of revenue …

    that along with professional management instead of political hacks running the T will never occur ……

  • William Bee

    You guys love to spread “misinformation” to get the public upset and advance your agenda. You are wrong about 20 years and no minimum age. There is a 20 year and 55 age early reduced pension which has severe penalties. And no one retires with a FULL pension at 23 years ! It takes over 30 years to get a FULL pension. And do you know….that if I were to work 18 years and left the MBTA, I would get NOTHING, but my own contributions plus 3% interest –never getting pension at all ! A State worker would be vested and when he turned 55 or 65 would receive some kind of pension. Even a private sector worker could walk away with his own and his employer’s 401-K matching contributions in as little as 3 – 10 years and be vested. So, be careful who you ENVY. I’ve seen people work 22 years and leave, walking away with relatively nothing.

  • Todd Downey

    William Bee is 100% correct even when you reach 23yrs your pension isn’t 100% it’s 60% of your three best working years excluding overtime.
    So if you made 33,000 dollars you would receive a pension of 19,800 dollars where in Massachusetts can you live on that????
    The media needs to get its facts correct!!

  • jerry

    Sooooo what if you only get 60%. you retire at 40 after working 20yrs and collect for 40 or 50.

  • tirakalicious

    The State pension system is the system that should be reformed to mirror the MBTA’s.
    First, in 10 years with the State Plan you get a pension and healthcare at age 55. My brother, a millionaire from dot.com wanted to retire but his wife and kids need healthcare so he went to the State at age 45 and worked 10 years and 2 months and now gets $19,600 a year in a pension and healthcare (only pays 15% of premium) for life. He is just 58 years old but lives in Florida, Aspen and Nantucket. Why should someone get a pension and healthcare after 10 years.
    So, for every one pension and one healthcare plan you MUST work 25 years at the MBTA and be age 55. So, do the math. For every one MBTA pension you have the possibility of 2.5 pensions and 2.5 Healthcare plans at the State. That is why the GIC insurance system is bankrupting Massachusetts. Blue Cross won’t even bid on GIC because they say the system is riddled with FRAUD and never been audited.
    Another Fact. The average State Pension is $28,600 per retiree whereby the average MBTA retiree receives $27,450. State pensions are higher than MBTA pensions.
    The State System discriminates based on age. If you work 30 years from age 25 to age 55 you get a much smaller pension (about 42%) than if you work 30 years from age 35 to age 65 (about 66%) about 24% more. PLEASE, 30 years of work service is 30 years of work….what is with the age discrimination. SUE THE STATE.
    No confession time ! I left a very lucrative job from an insurance company at age 55 to work at the state for 10 years and get a 25% pension and cheap healthcare for life when I turn 65. ALL THIS for only 10 years of work ….I have just under 2 years left (woo hoo). My wife passed away over 10 years ago and I married a much younger woman (12 years younger) and we have two young children. I’m financially set but need her to have healthcare for life and the small pension of about $24,000 is great too. The State System is so FLAWED….mirror it to the MBTA ….working 25 years in NOT appealing, working 10 for a pension and healthcare is a walk in the park.