When a Northwestern Pacific Railroad Co. train rolled to a stop in Santa Rosa's Railroad Square last Thursday, it represented a landmark moment in the county's transit history. The train was hauling concrete railroad ties to rebuild the rail line connecting Marin and Sonoma counties.
It was a signal that construction of the new Sonoma Marin Area Rail Transit line was officially under way. It's been a long time in waiting. But this is just the latest of several major steps that indicate SMART is making progress.
Just weeks earlier, the transit agency announced it had issued nearly $200 million in bonds to fund construction of the rail line. The bonds are being paid off with the Measure Q quarter-cent sales tax revenue approved by voters in 2008.
But SMART's most promising achievement of late probably received the least attention.
On May 16, SMART directors gave final approval to a pension package, one that calls for significantly lower benefits for new employees than those promised to existing workers.
Our preference would have been to see an across-the-board reduction in retirement packages for all workers. But given the legal limitations that prevent the board from changing existing contracts, this is the best that can be expected for now.
Furthermore, this is the most significant step forward to date by any local agency in confronting the pension dilemma. And it comes at the most critical time for SMART — just as it is about to hire about 100 workers over the next 12 to 18 months.
Under the new plan, employees will receive pensions equal to 2 percent of their final salary for each year of service up to age 60. Currently, SMART employees can take their pension at age 55.
But the plan's most significant differences are its anti-spiking provisions. For example, pensions for new employees will be linked to base salary and will not include specialty pay and unused vacation, sick time or administrative pay. Those have been used to spike the final-year salaries for existing employees in order to ensure a higher annual pension.
Furthermore, pensions for new employees will be based on the average of their final three years' salary rather than just the single highest year used for current employees.
In addition, new employees and SMART will split the costs of annual contributions to the California Public Employee Retirement System, and all future cost increases will be evenly divided as well.
That's a significant change from current practice, which has left taxpayers holding the bag in making up for CalPERS' investment losses.
The human impacts of creating such a two-tier system are hardly something worth celebrating. The next generation of workers will long be paying for the excesses of this one — and this only ensures that some of them will confront that burden with a smaller set of benefits.
Nevertheless, these terms are still significantly better than those offered in the private sector where defined benefit pensions are a vanishing breed.
And they offer hope that the runaway train known as retirement benefits may be showing down just as the North Bay's first commuter train in more than 50 years is getting up to speed.