The retirement fund serving Greater Boston's transit workers fired back at a think tank report highly critical of its operations.
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On Monday, libertarian-leaning Pioneer said the $1.6 billion fund, which operates independently of the Massachusetts Bay Transportation Authority, operated under a poor governance structure, no independent oversight and an incoherent investment strategy, and called it rife with cronyism and "endemic" conflicts of interest.
In his report, titled "Hard lessons for Institutional Investors from the MBTA Retirement Fund," senior fellow for finance Iliya Atanasov said the fund dramatically underperforms the state retirement fund.
"An objective analysis of the MBTA Retirement Fund's performance under current management would demonstrate returns as good or better than similar funds," added Crawford, "In fact, in the seven years under current management, the fund's performance exceeds PRIM's rate of return 5.48% vs. 4.78%."
PRIM, or Massachusetts Pension Reserves Investment Management, is the $58 billion pension fund for public employees.
Though publicly financed, the MBTA Retirement Fund operates as a private trust to manage pensions for 12,000 current and former employees.
Backed by a state Supreme Judicial Court ruling 21 years ago, the fund has resisted efforts to release pension data in the face of a sunshine provision to a 2009 transportation law.
"This situation exemplifies two truisms," said St. John's University law professor Anthony Sabino of Mineola, N.Y. "First, no pension fund works perfectly. One cannot expect a flawless performance, so there is no need to demonize the MBTA fund.
"Second, notwithstanding the above, public pension funds have to be even more open and transparent, in order to avoid poor management."
According to Sabino, public entities are subject to different sets of pressures, some political, than private businesses. "Therefore, they have to work even harder at assuring competent management, openness, and transparency," he said.
