At the end of the month SEPTA will see 85 of its managers walk out the door and into retirement. December always brings departures, said Rich Burnfield, the agency’s deputy general manager, but this year there’s a larger than normal exodus due to some changes that are making it more palatable for long time employees to take off than stick around.
This summer SEPTA made some major changes in the benefits packages for non-union employees that will go into effect in 2016. Retirees will be able to keep their health insurance for less time. Overtime will no longer factor in to pension payments, which are based on the average annual income of the last three years of employment. Managers will have to pay an increasing amount toward their pensions. A one percent of salary contribution goes up to 2.5 percent at the end of the year, and then 3.5 percent the year after that.
“We’re looking at the long term prospects for our pension fund,” Burnfield said. “We looked at changes that we could make that would provide for long term security.”
SEPTA pays about $90 million a year into the pension, which has $1.1 billion in assets, about 60 percent of what is needed to meet obligations. Returns from the pension fund have been less than predicted, and as a result SEPTA has sought ways to try to stabilize pensions. The changes this summer were expected to save SEPTA $183 million.
So 85 of the agency’s 1,700 managers , earning an average of $60,000 to $65,000 each, with experience ranging from 20 to 30 years, are leaving before the changes to their benefits go into effect. The maximum pension a person can receive is about 60 percent of their annual salary, SEPTA officials said.
Among the people departing are the head of the operating budget, a number of people with the operating group and the agency’s spokeswoman, Jerri Williams, who is departing after more than seven years to pursue a writing career. She’s already begun shopping around her first novel, a tale of a morally dubious FBI agent on the trail of corruption in the Philadelphia strip club industry. Williams is basing her book in part on her own experiences working with the FBI. As a former agent with the bureau, Williams will be drawing pensions from both SEPTA and the FBI, something Burnfield said isn’t typical among the retirees, since most have been SEPTA employees much of their careers. Some even go back as far as Conrail.
He noted among the changes made this summer was a new formula for who is eligible to receive a pension. New employees must now stay 10 years, rather than five, before being eligible.
Now SEPTA will be looking to replace those people through internal promotions and hires.
“I’m not going to say we’re not going to have some vacancies come December first but we have been gearing up for this,” Burnfield said.