The Sept. 12 editorial “Deficits in pensions — and courage” sensationalized the findings of a recent Government Accountability Office report on Metro pensions. The Washington Metropolitan Area Transit Authority’s pension fund is among the strongest in our region. That doesn’t mean WMATA should ignore the GAO’s recommendation to perform a risk analysis, but there is not a crisis to support taking the radical step of moving to a 401(k) system.
Similar to nearly every pension fund and 401(k) in the country, Metro’s pension experienced dramatic losses in the Great Recession and, as with nearly every other pension fund and 401(k) in the country, it has taken years to recover from those losses. However, Metro’s fund has recovered faster than many. Today, Metro’s pension is 77 percent funded. Metro could write a check today to cover 77 percent of the total pension benefits owed to all retirees and current employees. That is the average for large pension funds and significantly stronger than the largest public employee pension funds in Maryland and Virginia.
Just last year, a study found that total employee compensation at Metro, including benefits, is lower than at similar transit systems. Metro has problems, but not the crisis made out by the editorial. Far from ducking Metro’s problems, I have been a critic of poor management and a culture of mediocrity. I simply don’t agree that gutting the defined-benefit plan makes good public policy. That is what Republicans want for federal employees; I oppose that, too.
Gerald E. Connolly, Washington
The writer, a Democrat, represents Virginia’s 11th Congressional District in the House.
Metro has launched another attack on its workers’ pension plan. The Sept. 12 editorial on the system’s pensions and Metro Board Chairman Jack Evans again made the claim that the plan will eventually bankrupt Metro.
The Government Accountability Office report on Metro makes the unrefuted statement that Metro has never made a study of the potential risks of the plan to Metro’s long-term funding needs.
The current plan assumptions are based on historical records of investment returns, life expectancy, inflation rates and wage increases, and yield a normal cost of the plan of slightly more than 10 percent of wages. This percentage has been determined by a professional actuary who was agreed upon by Metro and Amalgamated Transit Union Local 689.
Mr. Evans is right when he says pension costs will increase. But they will not significantly increase as a percentage of wages. They will vary from year to year based on wage increases, stock market performance and other investment returns. The plan’s funding method takes all these various fluctuations into account as it smooths them out.
In 1976, the base pay for operators was $7.27 an hour; now, it is $32.81. Metro has not gone bankrupt. In 1983, Metro was contributing 18 percent of wages to the pension; today the ratio is about 14 percent and decreasing. Metro is not going to go bankrupt today.
Mike Golash, Washington
The writer is a former president of
Amalgamated Transit Union Local 689.