MTA: Plan targets LIRR pension abuse

The MTA wants Long Island Rail Road workers to give up a piece of their LIRR pensions if they are also collecting federal occupational disability benefits -- a plan that union leaders say would unfairly punish the legitimately injured.

Metropolitan Transportation Authority officials say the proposal -- among the concessions sought in the agency's contract impasse with railroad unions -- aims to curb widespread abuse of a U.S. Railroad Retirement Board occupational disability program by LIRR retirees.

But union leaders say the MTA is assuming all future LIRR retirees who apply for disability benefits are lying.

" 'Everybody's a fraud.' That's what they're saying -- before they even apply," said Anthony Simon, general chairman of the LIRR's largest labor organization, the Sheet Metal, Air, Rail and Transportation Union.

A sticking point

The proposal is one of the sticking points in a contentious labor battle between the MTA and eight LIRR unions. A scheduled two-day bargaining session Thursday in Washington, D.C., ended abruptly in less than four hours without a deal being made. The two sides are next expected to go before a White House-appointed Presidential Emergency Board of mediators in the spring. If a resolution is not reached by July 19, the unions have said they will strike.

Under the MTA's plan, first conceived in 2011, railroad retirees would agree to have their LIRR pensions offset by the amount they receive in federal disability benefits.

The MTA has said the plan is intended to close a loophole that creates an incentive for employees hired before 1988 to retire at 50, collect a full LIRR pension and also apply for federal disability benefits.

The Railroad Retirement Board inspector general says LIRR disability applications continue to be approved at a rate of nearly 96 percent, despite efforts by the board, and by the railroad, to curb fraud by increasing medical screening of applicants and more closely scrutinizing claims.

"There's a behavior out there that we need to address," MTA chairman Thomas Prendergast said. "I do not think that we should penalize people that are not going to abuse . . . [the system], but we definitely need to do something and there needs to be a dialogue, because I think everybody sees that as fraud and waste that we can't accept."

At a December hearing before a Presidential Emergency Board of mediators, Joel Parker, vice president of the Transportation Communications Union, called the proposal "a misguided response to the past abuses of the system."

Rather than go after existing LIRR retirees who exploited the disability program, the MTA's proposal would target current employees, "none of whom were involved in the prior misconduct."

Federal prosecutors have already secured convictions of more than two dozen former LIRR workers on fraud charges, and hundreds more have had their disability annuities revoked because of questions about the legitimacy of their claims.

Parker also told the Presidential Emergency Board that the proposal would unfairly curtail federal disability benefits from future LIRR retires, regardless of the legitimacy of their claim.

"Railroading has always been and still is a very dangerous place to work," Parker told the board, adding that the federal disability system provides "an important safety net" for workers.

Cheaters are the target

But MTA officials said their proposal would not apply to truly disabled employees, because those workers would likely retire upon becoming injured. Instead, MTA Labor Relations director Anita Miller told the board, most LIRR retirees collecting occupational disability benefits first mention their disability after retiring with a full pension.

"One hundred percent of the individuals who were arrested and convicted were all of that ilk," Miller said. "They left. They made no comment about having a disability, left the agency, applied. Now they are receiving both benefits.

"We are not looking to harm the individual who is, in fact, disabled," she added.

In its nonbinding recommendations, the board shot down the MTA's proposal, saying that while it understood the agency's motivation, it was not convinced that it was "reasonable or . . . an effective fraud prevention measure."

The MTA has rejected that board's findings, and said it will request that a second Presidential Emergency Board review both sides' arguments this spring. If a resolution is not reached, some 5,800 LIRR workers could strike.

William Arnone, chairman of the National Academy of Social Insurance -- a nonprofit Washington, D.C., organization studying insurance and pension issues, said the MTA's proposal sounded "very broad," and that he shared the unions' view that some retirees who have legitimate disability claims could be impacted.

"Usually the saying is that a few bad apples can ruin it for everyone," said Arnone, of Port Washington. "In this case, it's more than a few, but it's not 100 percent."