MBTA has decided to cut down on its workforce by offering early retirement to its personnel. The public transit agency wants to save some money and reduce its deficit by offering retirement. The employees who are not yet near retirement are also encouraged to leave the company if they are interested. The agency has taken this step first time since 1991.
The Early Retirement Plan
The Massachusetts Bay Transportation Authority wishes to save about $25 million by cutting off about 300 workers via the early retirement plan and several related benefits. The savings are expected to be used to ensure that the rising deficit of the agency is narrowed down some. This was stated by the agency officials. It is pertinent to add here that the budget deficit stands at $80 million currently.
What’s in Store for Workers Opting for Retirement
About 1,100 current employees of the agency are supposed to be eligible for the early retirement plan because all these people would be retiring by the end of the year. If one such employee opts for the voluntary retirement plan, he or she is offered a one-time incentive via cash. The average payment of such an incentive is around $16,500.
Voluntarily Leaving the Agency
The agency is also hoping that some of the employees who are not yet eligible for retirement would also be interested in leaving the agency. All the employees who have worked for the agency for over 5 years would be eligible for leaving the agency. Currently, about 2,200 are counted in this category.
If an employee who has served the agency for 5 to 10 years decides to quit the job, he or she is eligible for getting an incentive of $5,000. On the other hand, if the employee has served the agency for more than 10 years of experience would likely get $10,000 for leaving the agency. The agency has over 6,500 employees currently and hopes to see this number considerably reduced in the near future.
The Chief Administrator of MBTA, Mr. Brian Shortsleeve recently stated that the agency had taken similar steps in the year 1991. It was done to reduce the expenses related to payroll. This shows that offering early retirement is not a new thing for the agency. It would be interesting to see how the employees will react to these new schemes of the agency that are nothing but an attempt to save money.