Public Statement on the New MBTA Union Contract

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Yesterday, the MassDOT board approved a new labor agreement with the Boston Carmen’s Union that sidesteps real reform at the MBTA Retirement Fund.

The fund is in dire condition, with a $700 million unfunded liability that jeopardizes both retiree benefits and the MBTA’s finances.

The pact promises to close certain loopholes that have allowed MBTA employees to bank back pay to spike their pensions. This is a long-overdue and welcome reform, but one that barely scrapes the surface of the many fundamental problems the retirement fund faces. It is also the only significant gain for taxpayers from the deal.

?he fund promises to share information about retiree allowances with the T, which will then make it public. But individual pensions have already been released to the press.

State and union leaders also pledge to “work together” to make better financial disclosures in the MBTARF’s annual report. In the meantime, the pension fund remains a poster child for secretiveness and Massachusetts still ranks among the worst states in terms of government transparency.

Nothing in the agreement addresses the root cause of the fund’s woes: its broken and politicized governance, which is susceptible to cronyism and insider dealing. None of the fund’s board members or executives are being held accountable for the loss of $25 million on a dubious hedge fund investment or pervasive, documented failures of internal risk controls.

Another opportunity to work with labor to build a better future for the T and its employees has largely been missed. Worse, the four-year term of the agreement effectively prevents a new administration from enacting real reform.


Iliya Atanasov, Senior Fellow



Micaela Dawson, Communications Director

617-723-2277 ext. 203