Officials at the MBTA Transit Police pension fund overpaid retirees by nearly $500,000 at the same time it was receiving millions in money from the transit agency, according to a state investigation, which found officials mishandled the benefits of dozens of former Transit Police staff.
The MBTA Police Association Retirement Plan for years operated with “no system” to track and end payments to retirees when they were no longer eligible to receive them, state Inspector General Glenn A. Cunha’s office found.
That led the $94.5 million fund to make costly mistakes over 13 years between 2005 to 2018, during which it paid $470,217 more than it should have to two dozen retirees, Cunha said.
The fund reported having 110 retirees and beneficiaries in 2018, meaning those who were overpaid would have accounted for 22 percent of all those receiving benefits that year. (The number of retirees and beneficiaries grew to 122 in 2019, the most recent data available show.)
Twenty retirees continued to receive monthly supplemental checks — ranging between $500 to $700 each month — when they shouldn’t have, including one retiree who was overpaid by $58,100, according to Cunha’s office.
Another four retirees pocketed a combined $228,441 in unwarranted disability payments, including one who got nearly $78,000 in overpayments. In at least two cases, it was due to errors by the fund’s former director, Cunha’s office found.
In a letter Cunha’s office sent the fund and made public this month, he said each of the 24 retirees have since entered into plans to repay the erroneous payments. The fund’s executive director had identified each of the overpayments, and later tightened its internal controls on payouts, Cunha said.
The police pension fund operates separately from the $1.7 billion MBTA Retirement Fund, which includes most T employees and was the subject of intense state scrutiny in recent years while struggling with a massive unfunded liability.
But like the far larger T pension plan, the MBTA police fund also receives millions in contributions each year from the taxpayer-funded MBTA. Between 2014 and 2019 alone, the transit agency paid roughly $15.9 million into the police retirement fund, including $3.3 million in 2019, records show.
Despite the infusions of public money, it also considers itself a private plan, a designation it used to previously fight disclosures of its annual list of payouts to retirees.
Transit Police officers who were hired before December 2018 are allowed to retire early at 52 years old if they have at least 23 years of service. They then are entitled to receive so-called supplemental benefit checks until they are 62, ranging from $500 a month until they turn 57, and then $700 a month for the five years after that.
The extra benefits are “designed to augment” their income until they are eligible to receive Social Security benefits, according to Cunha’s letter.
The overpayments came to light only after the board hired executive director Janet Rivard in 2017. According to the inspector general’s office, the outgoing director told Rivard “about one retiree who had been overpaid.” It prompted her to review 20 years of payouts of supplemental benefits, where she found 19 more.
At the suggestion of a board member, Rivard then began reviewing disability retirement checks the fund pays out, and found the overpayments to the other four retirees, according to Cunha. One retiree was overpaid $77,620 and another $74,951.
The inspector general’s office declined to comment Friday on what prompted its investigation into the fund. Cunha said in his letter that his office conducted its own review of the payouts to retirees and agreed with Rivard’s findings.
Rivard did not respond to Boston Globe questions, saying in e-mails that she needed authorization from the fund’s board before doing so. Cunha said the fund has since installed more stringent checks on how it pays out benefits.
“These changes put a new level of control in place to allow Ms. Rivard to track and stop supplemental and disability retirement benefits at the appropriate time,” Cunha wrote.
Cunha’s office also suggested the fund beef up its audit process to include a review of its internal controls and that its officials take a training course.