SEPTA board approves contract, skirting strike

SEPTA's board of directors on Thursday approved the recently negotiated contract with 5,000 bus drivers, subway and trolley operators, cashiers and mechanics.

The agreement with members of Transport Workers Union Local 234 avoided a possible transit strike.

The new pact, which was ratified earlier this month by TWU members, provides a five percent raise over the two-year term of the contract.

But it postpones difficult decisions on two major issues that will resurface soon: pensions and health-care contributions.

The TWU had argued its members were getting shortchanged on their retirement benefits compared with SEPTA managers. That debate will continue.

The other cloud on the horizon is health-care contributions.

SEPTA workers, like many employees of large companies, have relatively generous health insurance benefits.

Such "Cadillac" insurance plans will soon be taxed more heavily than others under terms of the Affordable Care Act.

Beginning in 2018, a 40 percent excise tax will be imposed on the value of health insurance benefits exceeding a certain threshold. The thresholds are $10,200 for individual coverage and $27,500 for family coverage (indexed to inflation).

The "Cadillac tax" in Obamacare is designed to bring down overall health costs by increasing what some people have to pay.

That has angered many of the targets of the tax, such as SEPTA workers.

The TWU and SEPTA have been trying to calculate the impact of the tax without knowing exactly what the costs will be in 2018.

Unable to come to terms on the issue, they agreed to wait two more years.

The vote by the SEPTA board on Thursday was unanimous, following the 2,683-854 ratification by TWU members early this month.

Source: Philly.com