Charlie Baker’s Ultimatum to Pension Fund: Submit to More Rigorous Audit or Funding Will Be Halted

Massachusetts Governor Charlie Baker has proposed a piece of legislation that would mandate a more rigorous independent audit of the Massachusetts Bay Transportation Authority’s (MBTA) “T” pension fund.

If the fund declines the audit, then the state would halt pension contributions for new hires.

From the Boston Globe:

The measure, which would need to be passed by the Legislature, says the MBTA will not make pension contributions for new T employees until the retirement fund has an independent audit that meets the widely followed Governmental Accounting Standards Board requirements.

The audit would have to take place within 120 days of the measure being enacted, according to the proposed legislation.

“The administration deeply values MBTA employees’ hard work to keep the transit system running, but serious reforms are necessary to provide greater transparency, protect taxpayer dollars and the contributions of longtime MBTA workers,’’ Baker spokeswoman Elizabeth Guyton said in a statement.

In the past, audits of the $1.6 billion pension fund, performed by KPMG, have been incomplete because the pension board withheld information.

[…]

The pension fund has refused to follow legislation passed in 2013 aimed at requiring greater disclosure of its operations.

As Pension360 has covered, the MBTA fund is a private trust and thus does not have to abide by the public disclosure rules that other funds must follow.

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