MTAcre - If a tree falls in the ACRE, does ANYONE hear it ? is anyone listening ?

To my fellow Metro North Engineers

I am writing this letter to strongly urge that you vote no to the Memorandum of Understanding recently received. We all owe a great debt to former UTU Local #645 General Chairman Mike Cannino and his committee on the LIRR for obtaining the MTA defined benefit plan. The committee assessed their members $200.00 per person for the last round of negotiations. They raised $50,000 and did the hard work for 21/2 years of lobbying for the DB Plan. They attended diners for state senators and assemblymen complaining about having a defined contribution plan (Money Purchase Agreement - Vanguard) tied to the stock market, compared to teachers, state workers and their predecessors under the LIRR pension. I have been a proponent of the DB plan since late in 1994. All over the country corporations are doing away with DB plans and converting to DC plans so that the burden is on the employee to be responsible for their pensions. We are all very fortunate to have the MTA DB plan, with the disability provision and the death benefit. This plan along with our annuity from railroad retirement greatly increases our percentage of final year salary. Prior to becoming participants in the MTA DB plan, MN employees retiring with a disability, retired having no medical coverage on a fixed income. Now on a disability we collect from RRB and the MTA DB plan, with medical coverage to age 65. Disabled railroad workers were allowed to make up to $400.00 per month on a disability. President Bush recently signed into law to increase that to $700 per month and index yearly, thanks to the International unions. The families of our retired workers received $2,000 when the employee passed away. Now we receive the death benefit from the defined benefit plan.

The first contract after obtaining this wonderful DB plan, they are already watering down what was accomplished. For what reason can anyone justify going beyond the 60 and 30 years of service provision under railroad retirement. The Teamsters followed TWU local 100 and had their members pay medical coverage rather than increasing the retirement age and diminishing the pension.
Does anyone really believe that MN will not want employees paying medical coverage after June 15, 2010? Everyone hired out prior to 1988 on the LIRR can retire at 50 years of age with 20 years of service. Employees now working at MN can retire at age 55 under the DB plan. This new Memorandum of Understanding provides for 62 and 30 for new employees. Talk about a divided work force. It will be interesting when the LIRR trains come into GCT, and the crews hired out prior to 1988 start talking about retiring at 50, and our new employees have to wait until age 62.

Can you imagine how Mike Cannino, the new General Chairman Anthony Simon, the committee, and the membership of UTU Local #645 must feel like after all their hard work? The consolidated pensions has a total plan asset amount of around 2.1 billion dollars. Two more bus lines MABSTOA and a TWU bus line will become participants and bring an additional 470 million and 210 million into the plan. We have no union employee on the pension board, following the money. The members of the pension board are: Bernie Rosen ( Chairman ), James Sedore (MTA board member), Margaret Connor (MTA), Joseph Pokorny (LI bus), Kim Porcelain (LIRR), Vacant (MTA bus), Vacant (MNR), Kevin McKenna ( NYCT- for SIRTOA) and Jeanne Hitman - secretary. The old LIRR pension plan, with their unfunded pension liabilities, is included with the consolidated pension plans.

I believe that Chris Silvera and the Teamsters were correct by keeping the DB Plan for his workers at 55 and 30, and have everyone share the pain and pay 2% for medical on a forty hour work week. We have pattern bargaining within the MTA agencies, but not pattern benefits. Mr. Toussaint and TWU local #100 negotiated our wages these last rounds. The reason that the TWU accepted a 0% wage in 2003 was because their health and welfare was in disarray. The union paid the medical bills and they had no money. The MTA took over the payments of the medical coverage and had to have an immediate cash infusion. Additional money was needed to continue to be able to pay the medical coverage.

The MTA deferred plans (401K and 457 Plan) have around 1.5 billion dollars. Ed Watt is the secretary-treasurer of Transport Workers Union Local 100. He is a member of the MTA deferred committee. He does not attend all the meetings. Has anyone ever read any minutes from these meetings? Fascore handles these plans. The contract with Fascore runs out the end of 2008. By the end of 2007 the MTA must put out an RFP ( request for proposal) so that possibly someone else can handle these plans. As stated in THE CHIEF for every dollar the NYC plan participants pay Fascore for administrative fees and services, the MTA participants pays Fascore $3.00. These fees are based on the numbers of participants and other factors. The MTA should be included with the NYC participants, to lower the costs.

In the years ahead, I hope that union leaders study benefits (that may not cost the railroad much or any money) from the federal tax code, such as HSA (health savings accounts) or Roth 401K plans, and benefits that NYS offers workers presently. Look at the contracts that other commuter railroads and freight railroads are signing with the International unions. Then compare to outside contracts in other industries. Try to build on what you already have. Don't try to sell everything to accomplish agreements. The COLA (cost of living) for the MTA- DB plan should be increased yearly every January. Presently, it is decided by the board of managers whether a COLA should be paid. No COLA has ever been given. The way that the COLA is figured follows the way NYS workers receive their automatic yearly COLA. It is greatly inferior to how the federal government and railroad retirement increases social security and Tier 1 every year. We should negotiate to have the COLA for our DB plan mirror social security increases, and paid automatically every January 1st.

In closing, I want to thank you for taking the time to read this letter. I ask again that you vote no, so that our present DB plan is not diminished. There is an old adage " If it isn't broke, don't fix it". I am close to 55 myself and plan on retiring. I want you all to know it has been my honor to know and work with all of you. A retired engineer once told me working on the railroad was a good job, but no place for a blind man. Always follow the money. No matter how this vote turns out, I wish everyone the best now and in the years to come.

Fraternally,
T. F. McGrath