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Fare hike possible to save MBTA pension fund

The MBTA pension fund is facing a crisis and that could mean higher fares for riders.

"The coming years will require increasingly large taxpayer contributions as well as MBTA employee contributions in order to keep the fund afloat," said Brian Shortsleeve, MBTA general manager.

MBTA board members met Monday afternoon, with the pension issue high on the agenda.

A new report says that the  retirement fund needs about $1 billion over the next 18 years to remain solvent and pay its retirees. In addition, market returns will not likely be high enough to do this, so it will need to be taxpayer funding.

Shortsleeve said it's just simple math of not enough coming in and too much coming out.

"Without immediate and decisive action to put the plan on a more sustainable path we will face only bad choices to pay for retiree benefits," he said.

One of the reason for the shortfall is that there are 900 more retirees drawing benefits than there are current workers paying in, said Shortsleeve.

Jim O'Brien from the Carmen's Union said disputes a few of the numbers in the report.

"Right now I think there's about 400 people that are actually collecting a pension than are actually paying into it. Not the 900 number that he showed today," he said.

One option to fix the gap is a rider bailout, meaning asking legislators to lift the cap on fare increases. Proposed hikes include monthly passes from $84.50 to $105.33 and single subway fare from $2.25 to $2.80.

Another option is for the MBTA to forgo capital investments and divert that money to pensions.

The last option discussed in the report is a taxpayer bailout, with legislation that could appropriate the $1 billion to fund the pension program.

Unlike other state employees, MBTA employees receive both a full pension and social security. The report notes that MBTA employees earn more in post-retirement pensions than state employees and teachers. Fore example, a teacher retiring at 60 could have a pension of $29,000 a year while an MBTA employee would receive $49,200.

Shortsleeve said that is nothing is done, then the math is simple - the retirement fund will run out of money.

Last year, the MBTA voted to raise fares, with a link pass jumping from $75 to $84.50. See last year's story about the fare hike below

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