T workers bank sick time to boost pensions, study says

Printed from: https://newbostonpost.com/2016/01/26/t-workers-bank-sick-time-to-boost-pensions-study-says/

BOSTON – Massachusetts Bay Transportation Authority workers are in line for more than $49 million in collective retirement pay simply because they stashed away unused sick days, according to an analysis from the Pioneer Institute in Boston.

Public records obtained by the policy research organization show that the T’s staff piled up 380,155 unused sick days by the end of 2014. One employee had amassed 407 days.

It is “highly likely” that the nearly $50 million financial impact has “grown and it doesn’t include cost of living adjustments,” Mary Z. Connaughton, a certified public accountant and the study’s author, said by email. She oversees government transparency and finance administration at Pioneer, a nonprofit group that bases its policy recommendations on free-market principles.

The benefits of banking sick leave often multiplies for workers the longer they are employed, as the days are added to the employee’s credited time on the job at retirement. Connaughton cited an example presented in the 2013 MBTA retirement fund’s annual report. She said it shows that “sick leave of 150 days converts to seven months of credible membership service,” which can mean a boost in annual retirement income of $1,150 for a worker whose payments are based on  an average salary of $81,000 a year, assuming the retiree collects for 25 years.

The incentive to accumulate unused sick time stems from a 1975 arbitration decision that let workers use the days to increase pension payouts. Earned sick time ranges from 12 to 15 days each year for T workers, Connaughton said.

Compared with a state employee who accumulates unused sick time, transit workers get about three times the amount of benefit, in Connaughton’s analysis. But there’s a key difference in that typically state workers get a one-time payment for unused leave at retirement, payments that are often referred to as “boat checks.” Her analysis using the same basis shows the state worker would get a check for $9,462, while the value over 25 years of retirement for the T worker would come to $28,739.

The decades-old arbitration “weakens MBTA management’s hands when negotiating with its 30 unions,” Brian Shortsleeve, the T’s chief administrator, said in a statement about the study, pointing out that Gov. Charlie Baker tried to ban binding arbitration at the agency last year.

Since the beginning of this month, the T has required employees to use earned sick days and vacation time concurrently with Family and Medical Labor Act leave, Shortsleeve said.

“It’s good that the T is enforcing stricter compliance with its sick-day policy,” Connaughton said.

The T is grappling with a projected $242 million budget deficit. Among the ways being considered to close that gap are fare increases, and two proposals have been put forward, including subway fare hikes of about 5 percent or 10 percent starting in July. The agency also recently offered retirement incentives for administrative workers to cut as much as $36 million in annual costs.

“Initial data indicates the new attendance policy is having an early impact,” Shortsleeve said. “For the first three weeks of this year, overtime spending has decreased, absenteeism rates have declined, and the number of dropped bus trips is down.”

Contact Kara Bettis at [email protected] or on Twitter @karabettis.

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