In the past 15 years, the MBTA has paid Wall Street firms an estimated $236 million in interest after gambling on synthetic swaps. Such financial derivatives are rife with risk and were among the most significant contributors to the global financial crisis of 2008. The T’s reform-minded leadership would do well to trim these exposures, with an eye to eliminating them as soon as practically possible. Doing the right thing won’t be easy. As Pioneer revealed in its February 2016 paper entitled “The Reckless Cost of MBTA Financial Derivatives,” the T built up and then doubled down on an irresponsible derivatives portfolio in the 2000s. Tempted by small upfront premiums offered by investment banks, MBTA managers made bets that interest […]
About Iliya Atanasov
Iliya Atanasov is Pioneer’s Senior Fellow on Finance, leading the research tracks on pension portfolio management, infrastructure and municipal performance. Iliya received his PhD in Political Science from Rice University and is a former Presidential Fellow at the University. He also holds BAs in Business Administration, Economics and Political Science/ International Relations from the American University in Bulgaria.
Email: iatanasov at pioneerinstitute.org
Phone: (617) 723-2277
Entries by Iliya Atanasov
Friday, April 11, 2014 Iliya Atanasov The MBTA Retirement Fund’s management has been aggressively spending taxpayers’ and retirees’ money to fend off attempts by the media and the Legislature to shine a light on its books. And the reason is becoming all too obvious. Earlier this year, senior executives testified before the Legislature’s Joint Committee on Public Service that the fund is not a public entity and exists for the sole benefit of current and future retirees. Hence, they say, it should not be subject to public oversight. Looking to find an amicable solution, legislators patiently kept asking what information the retirement board is trying to protect. They received no clear answer. The board’s actions strongly suggest that it is […]
It cannot have been a particularly merry Christmas for Stephen Crawford, spokesman for the MBTA Retirement Fund. In the run-up to the holidays, a series of Boston Globe articles recounted a potentially fraudulent $25 million loss at the pension fund, blatant conflicts of interest and repeated failures to follow standard accounting practices – not to mention an ever-expanding investigation by the state attorney general, Martha Coakley. Seemingly unbowed by the controversy, Crawford told the Globe: “The pension fund is fully capable of meeting its obligations to its retirees and beneficiaries. The trust is solely responsible for meeting that responsibility – not the commonwealth.’’ [quote align=”right” color=”#999999″]Whether Mr. Crawford intentionally misrepresented the facts, fell victim to years of disinformation about past […]
Expert Testimony: Several Retirement Systems in Critical Condition, Fiscal Risks to Remain High New accounting rules will demand higher pension contributions; unfunded retiree healthcare liabilities major long-term threat BOSTON – The unfunded liabilities of several retirement systems in the state may precipitate a number of local bankruptcies in the next economic crisis, unless managers adopt more fiscally prudent policies, according to testimony given by Pioneer Senior Fellow on Finance Iliya Atanasov Tuesday. Testimony before the Joint Committee on Public Service of the General Court of the Commonwealth of Massachusetts Regarding the Fiscal Condition of Local Retirement Systems “Defined-benefit pensions and other postemployment benefits for public employees in Massachusetts will cast a growing shadow on the fiscal health of the commonwealth for the […]
Do pension funding changes display true fiscal responsibility or just election-year window dressing?
Public retirement funds’ managers should embrace new reforms designed to minimize risk during this period of continued market volatility.
Realistic investment assumptions and paying down unfunded liabilities more aggressively are indispensable if we are to achieve public pensions that are solvent, fair to employees and attract qualified and capable individuals to public service.