A quick comparison on the payouts for the Tier IV pension VS the Tier V pension:

A few assumptions have to be made to begin the calculations. To keep things simple, employee hires out at age 25. Assume an employee salary of $100,000.00 (this way you can use a multiplier to figure out exactly where everyone stands). Each employee will retire at his or her eligible retirement age. Assume the pension payout formula for the Tier V pension is the same as the Tier IV pension. Assume a life expectancy to age 70.

Tier IV Pension: Employee works for 30 years earning a $100,000.00 salary. Employee retires at age 55 and lives till age 70. Employee will collect the Tier IV pension for 15 years. Employee receives a $60,000.00 a year pension. Employee collects their pension over these 15 years; the MTA pays out $900,000.00 ($60,000 x 15) to the employee.

Tier V Pension: Employee works for 37 years earning a $100,000.00 salary. Employee retires at age 62 and lives to age 70. Employee will collect the Tier V pension for 8 years. Employee receives a $60,000.00 a year pension. Employee collects their pension over these 8 years; the MTA pays out $480,000.00 ($60,000 x 8) to the employee.

The Tier IV pension paid out $900,000.00 while the Tier V pension paid out $480,000.00. The MTA just saved $420,000.00 per employee by converting all new employees to the Tier V pension plan. Multiply this by 4,000 employees and the MTA just saved 1,680,000,000.00 on Metro-North new hires. That's 1.68 billion dollars.

If the new hires were to co-pay for their health and welfare benefits at the rate of 1.5% on a flat 40-hour week, even on the $100,000.00 a year salary, the co-payment would be $1,500.00 per year. If the employee paid this throughout their entire railroad career (30 years), it would cost the employee $45,000.00.

Now the question becomes, would you rather have these new employees co-paying for their medical at 1.5% on a flat 40 hour week ($45,000.00) and keep the Tier IV pension plan and be eligible to retire after 30 years of service at age 55 and collect their pension for 15 years and receive a $900,000 payout or would you rather these new employees work for 37 years, not co-pay their health and welfare (saving them $45,000.00 in co-payments) and retire with the Tier V pension plan which will only payout $480,000.00?

By keeping the Tier IV pension and co-paying for their health and welfare benefits at 1.5% on a flat 40 hour week, the new hires would be able to retire 7 years earlier, and realize a net gain of $375,000.00 in pension payments ($420,000.00 in additional pension payments minus the $45,000.00 for co-payments for health and welfare). Do you believe the $45,000.00 in health and welfare co-payments is worth an additional net gain of $375,000.00 in pension payouts and 7 more years of retirement for the new employee?

For those who say this salary and related figures are too high, all you have to do to put this into perspective and relative to your salary is place a decimal point in front of your salary and multiply. For example, if you make $48,575 just multiply above the figures by .48575 ($100,000 salary x .48575 = $48,575, $60,000 pension x .48575 = $29,145).

Remember all figures used in these examples are for comparison purposes only.  You would need to have an actuarial study done for each union and their entire membership to find out the exact cost, savings and payout per member.