TWU LOCAL 100 NEWS
OUR RETIREE BENEFITS CONTRACT AND
the MTA Budget
The MTA is sitting on $500million it can,but won't
tap to restore service cuts and settle a contract
with Local 100. That money is in an obscure fund
(a GASB 45 fund) that the MTA is NOT required
to have.
GASB 45 is an accounting standard for future liabilities for retiree medical
benefits. It only requires the MTA to calculate how much it may owe future
decades for retiree benefits for the present workforce. Several members have
voiced concern that if the MTA uses the GASB 45 fund to pay for raises ,it
will jeopardize medical benefits for nretirees.
THIS IS SIMPLY NOT TRUE. HERE'S WHY:
Not one penny of that fund has ever been used to pay for retiree's benefits. The TA and OA have always paid retiree medical benefits as they arise, directly from the operating budget. No special fund has been used or needed. Currently, those benefits account for 3% of the budget. Management can easily cover them, and always has.
Beginning in 2007, the TA and OA began collecting the 1.5% from each active member to pay for an improvement to retiree benefits.
That contribution more than paid for the increased cost and the TA/OA has held on the surplus.
The MTA claim they are being "prudent" and budgeting for $13 billion in future liabilities for retirees' medical coverage. The figure is based on flawed assumptions about when people will retire and how long they'll need coverage from the MTA. Looking at this from another angle, at the rate the MTA building up thier fund, it would take 203 years to be fully funded! Clearky, the fund is just being used to stash some money away untl the MTA Board decides what to use if for. Right now, this money should be used to fund out contract.