ATU President Addresses TriMet Board About Health Insurance

    Thank you for allowing the Union the opportunity to address this issue. I want to speak very briefly about the Other Post Retirement Benefit situation. Known as OPEB this is retiree health care.

    In 2006 a federal guideline was published called GASB 45. First time OPEB unfunded obligations had to be shown on government books.

    For TriMet that was a huge number. For over 44 years  TriMet put not a single cent aside to fund the retiree health care they promised to provide.

    Neil McFarlane has said that, in the future, TriMet has no intention of putting any money aside to reduce the amount of the OPEB unfunded obligation.

    TriMet uses its 44 year failure to honor its OPEB unfunded obligation to justify deep cuts in retiree and active health insurance.

    Retiree health benefits are especially important for TriMet retirees.Their pension is far below the state and local government average. They gave up higher pensions and they accepted a 10 year vesting period in exchange for health insurance. 

    They need health insurance transit workers become disabled and die younger than any other profession. A Millimen study of TriMet workers established that they die younger than their white collar counterparts at TriMet.

    It is unacceptable that TriMet continues to make no effort to fund OPEB. If they had done so 44 years ago, there would be no OPEB unfunded obligation.

    TriMet is not alone in this neglect. Other governmental agencies also failed to put money aside. Some, like the cities of Denver and Los Angeles, did timely honor their obligation and do not have a serious OPEB unfunded obligation.

    I have given you two documents. One was generated by the PEW charitable trust. It describes the nature of the GASB 45 problem and how cities are coping with it.

    The other is a presentation recently made to the City of Portland.  It describes how agencies can participate in an OPEB trust. Such a trust can greatly reduce the OPEB obligation and retiree health insurance costs going forward. Yet, it can still keep the benefit promises made to retirees.

    Despite what you are being told, the Union and TriMet have had NO meaningful discussions over health insurance. That is because TriMet would not give us access to the OPEB experts until this May. 

    The PEW report discusses a number of options. TriMet and the Union have discussed none of them.
We have a number of questions about the OPEB numbers you have been given. After months of asking, we were finally given permission to talk to the folks who developed those numbers.

    They were helpful and agreed that it would be possible for TriMet and the Union to work together with the actuaries to calculate how various changes could reduce the numbers.  We were seeking an opportunity to collaborate on solutions.

    But that isn’t going to happen because Randy Stedman refuses to let the Union have any further access to the actuaries...even if we pay for their time. I just gave you the correspondence related to the Union’s request to work with the actuaries. In it we ask for the opportunity to try various scenarios on benefit changes to see how to best reduce the OPEB liability. We have a problem with the actuaries being forbidden to work with us because they work with the joint pension trust. Mr. Stedman’s action in walling them off means their neutrality with regard to the pension trust has also been compromised.

    The three TriMet board members in attendance listened carefully and asked questions of myself and our financial analyst, Dick Hofland, that showed they heard what we said. Time will tell, however, as to whether the information we provided will make a difference in TriMet’s approach to retiree health insurance.

In Solidarity, Bruce Hansen, President ATU 757