MBTA pension punch ?could hit taxpayers

More than 1,100 MBTA workers — nearly 17 percent of the transit agency’s workforce — are eligible to retire this year, according to a Herald review that found about 10 percent of potential retirees are under the age of 50.

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It’s a potential pension-fund punch that comes as taxpayers are already bracing for T payments to the MBTA retirement board to top $90 million in the coming fiscal year. If all 1,105 potential retirees left work at the MBTA this year, it could result in more people on the pension rolls than on the payroll. There are 6,518 current T workers and 5,265 retirees collecting MBTA pensions as of last year, according to transit records.

More than half of the transit agency workers who can retire by the end of 2016 are under the age of 60, T records show. There are 428 workers in their 60s eligible to retire, while only 41 transit employees will be 70 or older this year, according to T data.

State lawmakers passed new rules in 2009 that required T workers to be at least 55 years old with 25 years of service to collect a pension.

But 80 percent of current MBTA workers are already grandfathered in under the old rules, which allow T employees to collect pensions at any age after just 23 years of work, according to MBTA Chief Administrator Brian Shortsleeve.

The Herald reported last week that the MBTA’s top pensioner — former Deputy General Manager Sean McCarthy, who oversaw the agency during last winter’s crippling storms — retired last June at age 50 with a $98,000 annual pension payout and went to work for T contractor STV Inc. a month later.

The MBTA pays STV Inc. millions of dollars annually for electrical, vehicle and civil engineering services. T retirees are prohibited from doing any work with the MBTA for at least a year after retirement, however, STV and T bosses insist McCarthy doesn’t work on any T projects for the MBTA contractor.

Payments to the T’s secretive retirement board are expected to balloon by at least $13 million next year.

The MBTA paid the pension fund $79 million this fiscal year. That annual payment is soaring even higher than expected because retirement board officials in the past have failed to factor in unused paid sick time, which retiring transit workers use to boost their pension, into the already estimated $868 million unfunded liability.

Despite rising T pension costs, Shortsleeve hopes to use any jump in retirements to the T’s advantage — to help reduce its operating costs.

Shortsleeve, who has been focused on cutting down on sick leave abuse at the T, said he hopes to slash $36 million from payroll expenses over the next two years — a reduction of about 325 positions — through voluntary retirements and reorganization of some departments.

“At the end of the day we’re going to focus on trying to do more with less around what I would describe as corporate services,” Shortsleeve said. “We’re not looking to reduce operators. What our riders need is great service and having adequate drivers and operators is part of that.”

The MBTA hired 251 bus and train operators this fiscal year, according to Shortsleeve, who told the Herald that only about 2,400 of the T’s workforce drive buses or trains.

Shortsleeve said he expects the T’s operating expenses to grow by less than 1 percent this year — the lowest increase in the past 15 years, which have seen an average annual bump of 5 percent.

“The path to the T balancing its budget is controlling its costs,” Shortsleeve said. “We’re trying to find ways to operate more efficiently and be leaner.”