Recent Ruling on MBTA Retirement Fund Major Victory for Transparency & Accountability
The Boston Globe and the Boston Herald reported on an important new Massachusetts Superior Court ruling that, according to the Globe, “the records of the MBTA pension fund should be open to the public because the system receives tens of millions of dollars of taxpayer funding from the transit authority each year.” The decision should be applauded by MBTA customers, taxpayers, and advocates of open government and accountability.
In a 2014 public hearing and in numerous reports and op-eds published since 2013 (including “Have the MBTA’s Retirement Plans Gone Off the Rails?,”) Pioneer Institute has raised concerns about the management and condition of the MBTA Retirement Fund and called for an end to the secrecy that has surrounded it. As Pioneer noted, the fund has considered itself a ‘private trust,’ even though taxpayers have contributed over $628 million to MBTA pensions over the last 18 years.
The MBTARF has long perpetuated the myth that the public is not impacted by its management decisions, claiming that it is fully capable of meeting its financial obligations without state help. But a Pioneer report found that the fund would become insolvent between 2024 and 2036 without taxpayer support. Three-quarters of pension fund contributions come from the MBTA, which receives significant state financial support.
The MBTARF’s secrecy is an especially serious concern because of the deterioration of its finances in recent years. A Pioneer report revealed that MBTA pensions fell from 95% funded in 2006 to only 68% by 2011, resulting in a $726 million unfunded liability.
Pioneer applauds the Superior Court ruling. The information that will be gained as a result of it will provide the data needed to develop a plan to address the MBTARF’s poor financial condition and high costs that exact a heavy burden on an already debt-ridden system.
Related Research:
Without Taxpayer Support, MBTA Retirement Fund Would Become Insolvent Between 2024 and 2036
Study Calls for MBTA Employees to Be Transferred to State Pension System
Have the MBTA’s Retirement Plans Gone Off the Rails?
Related Commentary:
Boston Herald: T undercount: Pensions higher than predicted due to sick days, vacation time
Boston Herald: Atanasov: Ts ˜private” pension board veers off track
The Bond Buyer: Interview Public Pensions and Disclosure
The Bond Buyer: Report: Cronyism, Conflicts Stunt MBTA Retirement Fund
Public Sector: Will the MBTA’s retirement fund ever come clean?
CommonWealth Magazine: T Retirement Fund fights transparency
WCVB NewsCenter 5: “Battle over MBTA retirement fund transparency takes center stage” (Feb. 26, 2014)
The Boston Globe: “MBTA pension fund may release more data” (Feb. 26, 2014)
The Boston Globe: “Report urges state to fire T’s pension directors” (Feb. 6, 2014)
The Boston Globe: “Mass. leaders back significant boost to pension fund”(Jan. 15, 2014)
Associated Press: Study warns of delays in funding Mass. pensions
