Retirees rock T pension like a runaway train

Experts fear ride far from over

More than half of the MBTA’s top pensions are being paid to former workers who retired just last year, according to new data critics say signal that the troubled retirement fund is staring down a wave of lucrative retirement payouts that is already costing taxpayers millions more.

Ex-T employees who retired last year now earn 12 of the top 20 most expensive pensions — and more than half of the top 50 — at the $1.5 billion fund, a Herald analysis of T pensioners showed.

The MBTA, meanwhile, is slated to contribute $84 million to the fund this year, or more than double the $37 million it gave a decade earlier, to help keep it afloat.

With generous union deals littering the bargaining table in past years, experts say the new retirees’ outsized share could be a reflection of escalating salaries. But it also points to a growing trend. When the crop of 2014 retirees entered the system, they accounted for just four of the top 20. Last year, the 2015 retirees accounted for 10.

Now, for the first time, two T retirees are making more than $90,000 a year in retirement, including Genghis Khan, a former bus driver who earns a $90,761 pension, the highest of 2016 retirees.

“It’s the long-term accumulation of the increases in the collective bargaining. It doesn’t show up when you sign the deal, it shows up five or 10 years down the line,” said Iliya Atanasov, a pension specialist and former senior fellow at the Pioneer Institute. He pointed to the new agreement the T signed last December with the Carmen’s Union Local 589 to limit pay increases as an exception.

“But that’s not going to do anything for pensions for the next five years,” he said. “You’re going to see similar or worse numbers. This is the beginning of the end of the really insane pension numbers.”

In all, 363 employees who retired last year are making a combined $17.8 million in pension payouts, for an average of $49,300, a Herald analysis shows.

It marks a dramatic jump from 2015, when 262 employees retired with an average $42,800 payout. The increases also follow a retirement incentive program the T offered last year that culled hundreds of employees from the payroll by dangling a one-time payout of 20 percent of their salary.

Steve Crawford, a spokesman for the T Retirement Fund, said many of the retirees had maxed out their pension by working more than 30 years, “and chose to take advantage of the retirement incentive.” He said fund officials are still analyzing their impact on the fund.

Joe Pesaturo, a T spokesman, said the top four pensions from 2016 belong to workers who logged more than three decades at the T.

They include Ratan Singhvi, an engineer who made $107,000 a year before retiring to get an $83,377 annual pension; John Driscoll, a former $179,000-a-year inspector, who’s now getting a $83,318 pension; and Patrick Kineavy, a former $115,000-a-year maintenance director who’s now getting an $80,470 annual pension.

“It’s not unusual for the most recent people to be earning the highest pensions,” said Kevin Blanchette, a former state rep and current chairman of the Worcester Regional Retirement System. “One of the curses of the T historically is that they have had a very generous plan at a very young age.”

Gov. Charlie Baker has pushed for the state to take control the T pension fund, which is managed independent of the transit agency. As part of his $40 billion budget proposal, he included a plan that would authorize, but not require, the state’s Pension Reserves Investment Management board to manage the fund’s investments.

A financial audit the T released in October showed that the fund’s value had plunged by nearly $90 million in 2015 alone.