Metro’s unfunded union liability will eventually disappear
Regarding Robert McCartney’s April 17 Regional Memo, “To rescue Metro, all parties need to give some” [Metro]:
The Transit Employees’ Retirement Plan has an unfunded liability of approximately $800 million, not $3 billion. The larger number refers to the total unfunded liability of all of Metro’s retirement benefits, including health insurance and management pensions. In 2009, an arbitrator eliminated retirement health benefits for employees hired after Jan. 1, 2010. This unfunded liability will shrink and eventually disappear.
The unfunded TERP liability is mainly a result of the Washington Metropolitan Area Transit Authority’s pension holiday from 1997 to 2006, during which it contributed nothing to the TERP.
Amalgamated Transit Union Local 689 members contributed to the TERP since it was created in 1945. In 1983, the union and management agreed that if the union gave up a 6.5 percent wage increase, WMATA would use that money to fund the plan. In 2004, to get WMATA to end its pension holiday, the union agreed to take a 1.5 percent pay raise instead of a 3 percent hike to increase pension funding.
On the issue of contract arbitration, there has been only one full contract arbitrated since 1980 — in 2008. The others were resolved through collective bargaining. The 2009 arbitration that led to the elimination of retiree health insurance will eventually save Metro more than $1 billion. It is hard to argue that this hurt Metro’s finances.
Mike Golash, Washington The writer is a former president of Amalgamated Transit Union Local 689.