Union Wins Tier 6 Refunds
Local 100 has reached an agreement with the MTA that will result in refunds of thousands of dollars to Local 100 members. Local 100 President Tony Utano uncovered a serious error in how the MTA is calculating paycheck deductions for some Tier 6-covered transit workers who exceed the overtime cap (currently approximately $17,000 for 2021) under the Tier 6 plan.
Before turning to litigation, President Tony Utano addressed the issue in a letter to the MTA last month. The MTA subsequently admitted their error after meeting with Utano and union counsel Denis Engel. As a result, the MTA has committed to correcting the situation as soon as possible, probably as soon as September, and to provide refunds to those who have been overcharged. They could not commit to a timeframe for refunds – but Utano made clear that any and all such refunds must be paid as soon as possible. Until the MTA completes a comprehensive review, the authority can’t state how many members will be receiving refunds.
According to the Tier 6 plan covering transit workers (Transit Operating Force 25-Year/Age 55 Retirement Plan), an employee should only be paying pension deductions based on his/her 40-hour pay rate, plus earned overtime up to the cap set by the plan in a given year.
A worker whose base rate, for example is $70,000, will pay pension deductions on that amount plus overtime up to approximately $17,000 in 2021. Therefore, deductions should stop at $87,000 in this example for the rest of the year. However, the MTA has been deducting contributions from certain members not yet identified on all monies earned over and above the cap, according to them, since 2015. The MTA believes that a computer programming error is the cause of the problem.
“We will closely monitor how the MTA rectifies this situation,” said Utano. “It will take time for them to correct it and get the overpayments back to our members caught up in this situation. But we are determined to ensure that management complies with the statute quickly.”
Local 100 will be providing periodic updates on this developing victory for pension justice.