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December 30, 2005

The Great Train Robbery

I bet you thought TWU leader Roger Toussaint lost in calling the disastrous Christmas MTA strike. I did too, until I read this scathing analysis by former NYC Parks Commission turned municipal gadfly, Henry Stern:

The Post and the News say the Transit Workers Union won a smashing victory over the MTA. The News gave the story its large type page one headline: “$UBWAY $ANTA CLAUSE: New contract gives $110 million pension payout bonanza for transit workers. The headline on the p5 story is STRIKING GOLD IN A NEW DEAL: Many Transit Workers get 14G. Four reporters share the byline. The lead editorial, on p36, is titled, TRANSIT WORKERS RIDE MTA GRAVY TRAIN. "Roger Toussaint and the Transit Workers Union made out like bandits after all by crippling New York in their lawless strike. Those many promises by top officials that a walkout would gain the workers nothing have gone up in a $110 million puff of smoke."

If Pataki and Bloomberg don't manage to push back on this outrageous giveaway, they should be ridden out of state on a rail. NYC has worked so long and so hard to step back from the precipice of bankruptcy to allow municipal unions to learn that the City can be extorted into big payouts. It is really infuriating to think that the workers who shut down the City before Christmas will be handsomely rewarded for their illegal actions.

December 30, 2005 at 09:21 AM | Permalink


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They better crush this deal. Every union in the country is silently hoping that this illegal strike bears fruit.

Posted by: Eric Lindholm | Dec 30, 2005 10:43:58 AM

I was very disappointed that the union got such a good deal, too, and have no sympathy for the strking workers. But this "giveaway" is the return of extra money paid in by MTA employees from their paychecks toward being able to retire at 55 when they thought the retirment age would be pushed up to 62 in a new contract. Since the age didn't change, the money belongs to the workers who paid it in, and the MTA deciding to just keep it would be pretty wrong, not to mention illegal.

Posted by: number77 | Jan 2, 2006 7:42:58 AM

I see number77 beat me to the punch, so I'll just reiterate that the pension rebate is a return of funds paid in by workers who wanted to be able to retire at 55. However, these payments were not made "when they thought the retirement age would be pushed up to 62 in a new contract." They were made between 1994 (I believe) and 2000, at a time when that was the ONLY way to retire at 55. In 2000, the New York State Legislature LOWERED the retirement age to 55 for all operating employees who had 25 years of service, and eliminated the requirement of an extra 2.3% contribution. Thus, the ~6 years of excess payments have been a bone of contention for 5 years. (see page 36 of this pdf link: http://video.google.com/videoplay?docid=5430343841227974645)

Posted by: maren a | Jan 2, 2006 10:33:55 AM

I have no desire to steal money from deserving transit workers. However, the MTA's defined benefit persion program (defined benefit means that the payments workers will receive is defined upfront, before they retire, in most cases as a percentage of the three final years average salary, at least in the public sector) is not at all similar to a defined contribution or 401-k style plan, where workers contribute a fixed amount every pay period and then (ordinarily) have some choice over how the money is invested; on retirement, whatever balance is in the account is theirs.

In the MTA case, the union negotiated (back in 1994, according to maren a) for the option of allowing its members to elect to retire at age 55 by agreeing to pay 2% of the salary to the retirement fund. Subsequently, again according to maren, the NYS Legislature decided (either as part of a collective bargaining process or in response to union lobbying), to allow all MTA workers to retire at 55 without any additional payment.

Now that decision to give this benefit to all workers without regard to those who had, in effect, foregone a portion of their pay to buy this benefit, may have been unfair. Certainly, if I had paid the extra 2% each year for 6 years, I would have been pissed to see everyone else who hadn't paid anything get the same benefit that I thought I was paying for. But, in reality, the 2% annual contribution for 6 years would not have come close to funding the cost of early retirement. And in no legal sense were the contributions I had made via foregone pay "mine;" it was simply an optional component of my total compensation package.

That said, it would seem just to make some sort of adjustment to equalize the treatment of those who paid into this plan, assuming it would gain them something, versus the rest of their colleagues. However, taking the money out of the NYS pension plan or the MTA budget, particularly after an illegal strike at a critical time designed to inflict maximum damage on NYC's businesses and citizens, is just plain wrong.

Worse, it will only ensure a repitition of this type of labor extortion in the future.

I'd vote for breaking the transit system into independent companies and selling them off to the highest bidder. Failing that, let's invest in automating the subways and replace any bus drivers who decide to illegally strike.

Posted by: Spart | Jan 2, 2006 10:53:30 PM

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