The Pioneer Institute has sent a letter urging legislative leaders and the governor to take up 16 specific reforms for the MBTA retirement fund, in the wake of a $25 million hedge fund loss and controversy over the fund’s lack of transparency.
The changes proposed by the Boston-based think tank include requiring disclosure of the $1.6 billion fund’s investment policy and meeting minutes, and other measures in line with ethics rules and standards that apply to all public agencies and funds.
The MBTA retirement fund was organized as a private trust, exempting it from typical ethics and disclosure rules. Its trustees have refused to change their practices of closed-door meetings and minimal disclosure of financial documents, despite a recent public hearing before the Legislature and requests from research groups and news outlets for records.
“The past year has seen the MBTA Retirement Fund mired in scandals involving conflicts of interest, losses of taxpayer money and, to put it mildly, imprudent attitudes towards the general public and the public trust,’’ said the Pioneer letter, addressed to state Senator William Brownsberger, a Democrat from Belmont who chaired recent hearings in the Legislature on the fund. The open letter also was sent to Governor Deval Patrick, House speaker Robert DeLeo, Senate president Therese Murray and others.
Steve Crawford, a spokesman for the pension fund, said “An objective analysis of the MBTA Retirement Fund’s performance under current management would demonstrate returns as good or better than similar funds.”
A spokesman for the pension fund was not immediately available for comment.
The Globe reported at the end of last year that the former head of the retirement fund, Karl White, had gone to work for a New York hedge fund and in 2007 recommended one of its investments to the MBTA pension fund. That MBTA has since lost its entire $25 million investment in Fletcher Asset Management, whose funds are bankrupt.
The MBTA pension fund did not disclose the loss in its annual reports or on its website until this year.
The Pioneer Institute, long a critic of the MBTA and its pension fund trustees, urges the state political leaders to adopt the reform measures when negotiating the fund agreement’s renewal this year, and in the Massachusetts 2015 fiscal budget.