Saturday, February 20, 2010

Pension Reform Needed to Improve Transit Finances

Here in the DC area, our subway, the 2nd most ridden in the country, faces possible service cuts and fare hikes, due to one growing cost - worker pensions. The pension contribution has grown from $50 million to over $100 million annually, or about $10,000 per worker. Meanwhile, in New Jersey, Chris Christie has pointed to NJ Transit's gold plated pension as a prime target for cuts.

We cannot expect to build transit systems for the 21st century if we compensate workers like it's still the 1950s. Defined-benefit pensions are rare in the private sector and add unnecessary cost to running a bus or rail system. If the market requires higher pay for transit employees, boost their base pay, but these pension death spirals have to stop.