Pension deficit rises to almost $1.1 Billion

Discussion relating to commuter rail, light rail, and subway operations of the MBTA.

Moderators: CRail, sery2831

Pension deficit rises to almost $1.1 Billion

Postby BandA » Mon Jun 27, 2016 11:06 pm

Continuing the discussion from the 2016 Fare Increase thread....

https://www.bostonglobe.com/business/2016/06/26/mbta-pension-fund-money-shortage-worsens/nNnmxb8QRAlVkBNpmvTrGL/story.html
The Massachusetts Bay Transportation Authority is still awaiting the pension fund’s financial valuations for last year. But if the estimates prove accurate, the pension fund, with $1.5 billion in assets and $2.6 billion in future obligations, is now just 58 percent funded.


According to the T’s calculations, which will be made public Monday at a fiscal control board meeting, the MBTA pension fund’s assets declined 7 percent from 2005 through 2014, while the assets of the state teachers’ pension system -- managed by PRIM -- have increased 25 percent.


Michael Mulhern, the pension fund’s executive director, recently announced he would resign in August, after a decade on the job.


http://www.fox25boston.com/news/fox25-investigates-triple-dipping-mbta-pension-chiefs-contract-remains-secret/368168918
Michael Mulhern, the MBTA pension chief who FOX25 Investigates uncovered is headed for a publicly funded triple dipper retirement, won’t let taxpayers see his contract – a document some of his own board members at the secretive pension system haven’t even seen.

FOX25 has been asking for two weeks to see Mulhern’s contract, which pays him $282,000 a year, but the taxpayer-funded pension board won’t publicly release it.
User avatar
BandA
 
Posts: 1827
Joined: Thu Oct 11, 2012 11:47 am

Re: Pension deficit rises to almost $1.1 Billion

Postby MBTA F40PH-2C 1050 » Tue Jun 28, 2016 12:09 pm

July 1st is going to be ugly on the first train that goes belly up
MBTA F40PH-2C 1050
 
Posts: 3498
Joined: Thu Mar 11, 2004 7:57 pm

Re: Pension deficit rises to almost $1.1 Billion

Postby F-line to Dudley via Park » Tue Jun 28, 2016 12:31 pm

Huh...so that's where Mulhern went after leaving the GM's seat. I was wondering why he hadn't taken his "least convincing BRT salesflak ever" act to CT FasTrak or some other transparent rubber-tire grift by now. Guess he found a better way to enrich himself right under our noses.


Say what you will about the relative merits-vs.-demerits of the last 10 years' worth of individual MBTA GM's, but the brainpower and PR skillset occupying that seat improved by leaps and bounds at the Mulhern/Grabauskas transition compared to the revolving door of forgettable dreck that preceded.
F-line to Dudley via Park
 
Posts: 7111
Joined: Fri Mar 11, 2005 7:26 pm
Location: North Cambridge

Re: Pension deficit rises to almost $1.1 Billion

Postby BandA » Tue Jun 28, 2016 11:19 pm

Grabauskas did a good job with the customer service part. But Romney and Grabauskas missed a major opportunity to make real changes: Romney controlled the T board, had his hand-picked GM Grabauskas running things, AND the union contracts came up for negotiation. He could have created a Fiscal Control Board ten years ago with a pen stroke, without even asking the legislature! But Romney wanted to run for President so he didn't want to make waves with the union, the legislature or take any service interruptions. It was clear to even the the casual observer even ten years ago the MBTA was/is insolvent.
User avatar
BandA
 
Posts: 1827
Joined: Thu Oct 11, 2012 11:47 am

Re: Pension deficit rises to almost $1.1 Billion

Postby CRail » Wed Jun 29, 2016 5:45 pm

This thread has the potential of becoming really ugly really fast.

The MBTA is a public service which needs to be funded. If it isn't funded properly, it doesn't have money. Solvency isn't a possible concept for a publicly funded service. The concept is quite elementary. As far as pension "deficits," you're comparing future obligations to the present assets. Of course that doesn't line up, as the future obligations will be funded by future assets.They aren't paying the people who aren't retired yet, pension funds do the opposite of that, that's how it works... The legislature, which has sucked dry the public funds, is in search for new money and they found some. Now just to prove they could do it better despite the fact that they haven't over and over again...
Moderator: Massachusetts Bay Transportation Authority
Avatar:3679A (since wrecked)/3623B (now in service as 3636B).
User avatar
CRail
 
Posts: 2122
Joined: Tue May 18, 2004 8:27 am
Location: Eastie

Re: Pension deficit rises to almost $1.1 Billion

Postby BandA » Wed Jun 29, 2016 8:00 pm

CRail wrote:This thread has the potential of becoming really ugly really fast.
Why?
Solvency isn't a possible concept for a publicly funded service.
Why not?
As far as pension "deficits," you're comparing future obligations to the present assets. Of course that doesn't line up, as the future obligations will be funded by future assets.They aren't paying the people who aren't retired yet, pension funds do the opposite of that, that's how it works...
A properly funded pension plan sets aside enough assets to cover future liabilities, assuming a reasonable return on investment. According to one of the articles, pension plans with less than 60% such as the MBTA are dangerously underfunded. [quote]

So now we have three areas where the MBTA is off by over $1,000,000,000: GLX, South Coast Rail, and the pension plan. And $7,000,000,000 deficit in state-of-good-repair
User avatar
BandA
 
Posts: 1827
Joined: Thu Oct 11, 2012 11:47 am

Re: Pension deficit rises to almost $1.1 Billion

Postby dm1120 » Wed Jun 29, 2016 9:01 pm

MBTA F40PH-2C 1050 wrote:July 1st is going to be ugly on the first train that goes belly up
I looked up what my Zone 4 pass cost 10 years ago. In 2007 it was $186/month. Now in 2016 it's about to become $263/month. That's over a 35% increase in less than a decade. People are tired and frustrated of paying more and receiving less in return.
dm1120
 
Posts: 46
Joined: Tue Mar 29, 2016 9:07 am

Re: Pension deficit rises to almost $1.1 Billion

Postby YamaOfParadise » Wed Jun 29, 2016 9:55 pm

dm1120 wrote:
MBTA F40PH-2C 1050 wrote:July 1st is going to be ugly on the first train that goes belly up
I looked up what my Zone 4 pass cost 10 years ago. In 2007 it was $186/month. Now in 2016 it's about to become $263/month. That's over a 35% increase in less than a decade. People are tired and frustrated of paying more and receiving less in return.


Using the Bureau of Labor Statistics' Inflation Calculator pegs $186 in 2006 as being about equivalent in spending power to $221.65 today; so, that's only about a $40 increase in the relative price. An increase nonetheless, but not nearly as bad as it looks comparing the raw numbers.
Consider contributing detailed railway data to OpenStreetMap for use in OpenRailwayMap!
User avatar
YamaOfParadise
 
Posts: 372
Joined: Fri Dec 06, 2013 5:36 pm
Location: Middlesex County, Connecticut

Re: Pension deficit rises to almost $1.1 Billion

Postby dm1120 » Thu Jun 30, 2016 6:39 am

YamaOfParadise wrote:
dm1120 wrote:
MBTA F40PH-2C 1050 wrote:July 1st is going to be ugly on the first train that goes belly up
I looked up what my Zone 4 pass cost 10 years ago. In 2007 it was $186/month. Now in 2016 it's about to become $263/month. That's over a 35% increase in less than a decade. People are tired and frustrated of paying more and receiving less in return.


Using the Bureau of Labor Statistics' Inflation Calculator pegs $186 in 2006 as being about equivalent in spending power to $221.65 today; so, that's only about a $40 increase in the relative price. An increase nonetheless, but not nearly as bad as it looks comparing the raw numbers.
Except that calculator doesn't account for inflation in Massachusetts, just national averages.

Regardless, the point is people are paying significantly more and receiving lower quality service. Where is the money going?
dm1120
 
Posts: 46
Joined: Tue Mar 29, 2016 9:07 am

Re: Pension deficit rises to almost $1.1 Billion

Postby Rockingham Racer » Thu Jun 30, 2016 6:44 am

dm1120 wrote:
YamaOfParadise wrote:
dm1120 wrote:
MBTA F40PH-2C 1050 wrote:July 1st is going to be ugly on the first train that goes belly up
I looked up what my Zone 4 pass cost 10 years ago. In 2007 it was $186/month. Now in 2016 it's about to become $263/month. That's over a 35% increase in less than a decade. People are tired and frustrated of paying more and receiving less in return.


Using the Bureau of Labor Statistics' Inflation Calculator pegs $186 in 2006 as being about equivalent in spending power to $221.65 today; so, that's only about a $40 increase in the relative price. An increase nonetheless, but not nearly as bad as it looks comparing the raw numbers.
Except that calculator doesn't account for inflation in Massachusetts, just national averages.

Regardless, the point is people are paying significantly more and receiving lower quality service. Where is the money going?


Read today's Boston Globe about one of the mayor's aides, and you might have an insight. Greed, unfortunately.
User avatar
Rockingham Racer
 
Posts: 2866
Joined: Wed Mar 17, 2004 9:25 pm

Re: Pension deficit rises to almost $1.1 Billion

Postby sery2831 » Sun Jul 03, 2016 11:38 am

Lets keep this board to railfan discussions. Pensions of MBTA employees are not in the scope of this board.
Moderator: MBTA Rail Operations
User avatar
sery2831
 
Posts: 5127
Joined: Fri Mar 12, 2004 2:15 pm
Location: Manchester, NH


Return to Massachusetts Bay Transportation Authority (MBTA)

Who is online

Users browsing this forum: No registered users and 1 guest