The incoming Baker administration will press for greater openness at the MBTA retirement fund and encourage it to operate more like other pensions for public workers, a spokesman for Governor-elect Charlie Baker said Monday.
“The governor-elect wants to protect the pensions of hard-working MBTA employees and feels greater transparency and disclosure could help the pension board make better investment decisions,’’ the spokesman, Tim Buckley, said in a statement. Given the significant investment of taxpayer dollars in the MBTA, he said, Baker “feels it is appropriate to explore ways to align the MBTA pension board’s investment practices with those of other public pension boards.”
The statement was in reaction to a Boston Globe story on Monday about an investment in a troubled hedge fund the $1.6 billion T pension fund did not disclose until more than a year after it knew of the problems there. The pension fund said it did not lose money on the $10 million investment, but it was the second time in a year that pension officials waited to report a problem investment to members or the public until long after the fact.
Baker’s spokesman declined to offer specifics on how he might tackle the issue. The pension fund is organized as a trust and in 1993 won a Supreme Judicial Court ruling that it does not have to make records public, hold open meetings, or follow the ethics rules of public agencies.
Governor Deval Patrick has been in favor of greater transparency at the MBTA pension fund. The Legislature had been, too, but lawmakers this year tried to reverse a measure they passed in 2013 to make the T pension follow rules more in line with other pensions for public workers. Governor Deval Patrick vetoed the reversal this summer, but the pension fund maintains that the law does not apply to it.
The MBTA pension fund received $58 million from the taxpayer-funded transit system last year, up from $55 million in 2012.
A governor’s main leverage with the MBTA pension fund is indirect. Governors get to appoint people to the seven-member Department of Transportation board, which in turn sends three “management” appointees to the six-member T retirement board.
Labor organizer Janice Loux, for instance, has served on both boards under several governors.
Alan Macdonald, whose term on the MassDOT board ended in September, said he believes the pension board should voluntarily adopt more open practices.
“We talked about it, looked at it, and recognized that legally speaking we didn’t have any authority,’’ Macdonald said. “If we could have a role, we would take one.”
The Globe is suing the MBTA pension fund to obtain records related to the fund’s $25 million loss last year in a hedge fund run by Fletcher Asset Management of New York. That investment had been recommended to the pension fund by its former executive director, Karl White, after he had gone to work for Fletcher.
Under ethics rules that apply to public agencies in Massachusetts, White would not have been permitted to approach his former colleagues for at least a year after quitting.