Misleading Story on Public Pensions is Not Accurate

A misleading story in the New York Daily News about public pensions being defrauded by Allianz, Inc. has caused unwarranted concern among some transit workers and other public sector workers here and across the country.
 
Local 100 wants you to know that your pension benefits HAVE NOT BEEN NEGATIVELY AFFECTED IN ANY WAY. 

In fact, the company at the center of the fraud, Allianz, has pled guilty to Wall Street type securities crimes and has agreed to pay an historic $3 billion in restitution to the many pension funds caught up in the fraud and a $2.3 billion fine.
 
TWU Local 100 President Tony Utano confirms that the Allianz corruption never threatened our pensions.  “TA and OA members are covered by defined benefit pensions which are Constitutionally guaranteed by the State of New York.  Our retirees, and all active members covered by these pensions are fully protected now, tomorrow and in the future,” he said. 
 
TWU Local 100 General Counsel Denis Engel underscored Utano’s remarks.  “The Daily News story unfortunately and wholly inaccurately stated that the Allianz fraud ‘gutted retirement savings’ of transit workers in defined benefit pensions. That is not a fact. A defined benefit pension is not like a 401(k) that can be negatively affected by bad investments and market fluctuation.  Defined benefit pensions for transit workers are fully guaranteed.  No one has anything to worry about.  Anyone who says otherwise is uninformed or intentionally lying.”

The Daily News story has been interpreted by some people as meaning that the MTA lost billions in the Allianz scheme – which simply isn’t true.  According to the Department of Justice, “more than a hundred institutions, representing more than one hundred thousand individuals, were victims of this scheme.”  The MTA’s share of the losses was a mere fraction of the total – which the settlement restores.
 
The MTA had joined a lawsuit against the corporate criminal in 2020 over these issues.  At that time, the MTA said: “To be clear, no employee will be affected as the MTA (pension) plans are defined benefit and as a result employee pensions are not at risk.”   
 
Yesterday, MTA executive John McCarthy added: “In September 2020, the MTA filed a lawsuit against Allianz to recover funds.  The parties have reached a settlement and filed a stipulation of dismissal.” The MTA also said: “Employees will get pension benefits to which they are entitled.”