Boston Herald
Wednesday, February 26, 2003

Massport gave new chief pricey retirement perk

By Joe Battenfeld

Massachusetts Port Authority CEO Craig P. Coy, heralded as a tough reformer when he took the post last year, negotiated a special retirement deal for himself that skirts the agency's own pension rules.

Coy, 52, will receive a $44,500 annual lifetime annuity after he turns 65 if he stays at Massport for the full five years of his deal, according to his contract, a copy of which was obtained by the Herald.

The special benefit is not available to any other Massport employees, who must work there a minimum of 10 years before becoming eligible for retirement benefits.

Coy's pension deal was not finalized until August, four months after the authority announced his hiring.

A Massport spokesman said the board of directors decided to grant the special pension to Coy so he wouldn't be ``penalized'' for not getting any retirement benefits under the authority's current rules.

If Coy receives the benefit for 20 years after his retirement, it would cost Massport nearly $900,000.

``It was a necessary move in terms of recruiting a top caliber executive,'' spokesman Jose Juves said. ``That (lack of a pension) proved to be an obstacle and we were able to overcome that.''

Coy earns $250,000 a year, and he is also eligible for bonuses if he meets or exceeds ``performance goals'' set by the Massport board, according to his contract. He gets five weeks accrued vacation a year plus use of a Massport vehicle.

Juves also confirmed that Coy already receives a federal pension for serving 20 years in the Coast Guard, although the amount is unclear.

Coy, a former White House adviser in the Reagan administration, was hired in April to reform the besieged agency after the Sept. 11 terror attacks, when two airliners that took off from Logan International Airport destroyed the World Trade Center towers in New York.

He replaced former executive director Virginia Buckingham, who was fired in November 2001.

During its search for a new chief, the Massport board decided to offer an increased salary and some retirement package in order to attract more candidates, according to Juves.

But Coy's contract was held up for four months after he was hired. Sources said the delay was partly due to negotiations over the retirement benefit.

Juves said the delay was due to working out the ``legal details'' of the contract. Coy's retirement benefit has never been publicly revealed.

At the time of Coy's hiring, Massport officials did not specifically disclose the deal, although Marshall Carter, who headed a Massport reform commission after the 9/11 attacks, said in a statement that Coy's contract would include a ``severance and pension clause . . . necessary to retain a top quality executive director.''

``This was an issue that came up during the interviewing process for chief executives,'' Juves said. ``It's something that's been done for the head of transportation authorities in (other cities).''

Coy is the first Massport chief to be eligible for retirement benefits. His predecessors, including Buckingham and Peter Blute, who was fired after participating in a Boston Harbor booze cruise, did not get any pension benefits.

Buckingham - now employed as an editorial writer by the Herald - earned $150,000 annually at Massport and the Massport board initially offered her a lucrative, $181,000 severance payment. But after protests from acting Gov. Jane M. Swift and others, the board reduced that payment by $47,000.

Coy's retirement setup is unusual for a public agency.

Because Coy would be ineligible for a regular Massport pension, the board decided to distribute his retirement from a special ``annuity'' contract from an insurance company. Shortly after he signed his contract, Massport began making payments to the annuity fund to provide for Coy's retirement, according to Juves.

After Coy turns 65, the insurance company holding the annuity will distribute the $44,500 annual payment directly. Coy will be responsible for paying $18,000 annually to the fund, bringing his total retirement amount to $62,500 a year.

The amounts are based on a calculation of what Coy would have received if he stayed at Massport for 10 years and became vested in the authority's retirement system.

If Coy leaves or is fired by Massport before the fourth year of his contract ends, he will not get the annuity. If he leaves during his fifth year, his renewal term, he would get a reduced amount, according to his contract.

Coy would become ineligible for the $44,500 annuity if he goes to work for another state agency and becomes vested in that retirement system.

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