The Massachusetts Legislature recently passed the fiscal 2015 state budget. That’s a good thing, but contained within that measure was an unrelated and discouraging piece of legislation.
The lawmakers voted to repeal a law that would have required the MBTA’s retirement and pension system to become more open and transparent. That law, passed only last year, would have required the T’s pension fund board of directors to adhere to the same disclosure and ethics rules that the larger, general state employees’ pension board has to follow.
(The MBTA pension fund manages roughly $1.6 billion, while the state employee fund manages $60 billion.)
Had the law not been repealed, the MBTA pension fund would have received much more needed public scrutiny. The pension board would have been required to hold open public meetings, submit to public records requests, report the executive salaries at the fund and follow standard conflict-of-interest rules.
Additionally, the fund’s investments and management strategies would have been more open to public examination and investigation.
Because the MBTA is a public agency, whose revenue comes from riders and state taxes, it is only common sense and responsive government that its financial management — including the administration of its pension fund — be aboveboard and accessible to public oversight.
Yet, traditionally, the T’s board has resisted openness. Legally, the pension fund operates as a private trust, which does permit more “secrecy” than would a different legal designation. Nonetheless, the pension board and its administration typically have seemed disturbingly content to remain opaque.
Some progress has been made in the composition of the board itself. Composed of six members, three have been appointed by Gov. Deval Patrick, and they are in favor of greater disclosure of the pension fund’s management. The other three are not.
What really needs to happen though, is for the Legislature to pass a law that would require the MBTA retirement board to follow the same ethics and disclosure rules to which the other 105 public retirement systems in the commonwealth adhere.