Dissecting the Transit Deal

Apparently the one-time payout to certain workers who paid into the pension plan before the worker contribution portion was phased out may actually harm the solvency of the entire plan. Go figure. The one-time $110 million payout will pay only a fraction of the entire workforce payments of $1,000 to $10,000, and the cost may actually be as high as $165 million:

McMahon and other experts were fuming about the MTA's agreeing to special payments of up to $10,000 for more than half the Transport Workers Union's members to settle the contract dispute with the 33,400-member Local 100, which conducted an illegal three-day strike that shut down the transit system.

The money for the windfall, which must be approved by the state Legislature, will come from so-called past "overpayments" by workers into their pension system.

Norman Rosenfeld, a former pension adviser to the TWU, estimated the cost of the whopping giveback could be as much as $165 million.

"I never thought the MTA would give it back," Rosenfeld said.

The bonuses for up to 20,000 of the TWU's members come at a time when officials have warned that the MTA's pension obligations are already seriously unfunded.

Considering that the MTA recently took half of the $1 billion in unanticipated revenues and put it towards the underfunded pension plan, this seems to be a bit of double dipping. It's a way to say that the MTA provided monies to the union workers out of the $1 billion, even though none of this money actually existed.

Once again, commuters and taxpayers are going to end up paying for this deal. Oh, and those workers in the pension plan have to wonder whether they've really gotten anything when the pension's solvency remains questionable.

UPDATE:
The Gothamist seems to be positive about the deal between the TWU and MTA - and thinks that the MTA can be trusted with figuring out its budget and its workers. Gothamist's writer, Jen Chung, couldn't be more hopelessly wrong. After all, the MTA apparently found $1 billion in unrealized revenues only a few weeks before the strike, and has repeatedly been found to screw with the books. Oh, and the union repeatedly claims that the MTA doesn't respect the workers. Meanwhile, the NY Daily News thinks that commuters and taxpayers just got royally hosed. Despite the fact that the union engaged in an illegal strike, it appears that nearly half of the union employees are going to be rewarded with pension refunds.

Prior Coverage: Awaiting a Deal
A Deal In Sight?
Tallying the Toll
Winners and Losers
Strike Over?
Seeing The Humor in Striking
Three Strikes and You're Out?
Rogering New York
A Pox On Both Their Houses
The Pension Gap
The TWU to NYC: We're Gonna Strike
Taking Sides in the Transit Strike

Technorati: toussant, toussaint, strike, nyc, transit strike.