Michael Mulhern, the executive director of the embattled MBTA Retirement Fund, will resign in August, he told its board.
The $1.6 billion pension fund for employees of the Massachusetts Bay Transportation Authority, the state agency that runs Greater Boston's mass transit system, has been under fire for its vigorous efforts to keep its records secret.
In his resignation letter, Mulhern said his staff has "patiently and professionally endured unprecedented internal scrutiny and ill-informed public criticism."
The pension fund is organized as a private trust – backed by a 1993 state Supreme Judicial Court ruling -- and is separate from the "T," as locals call the transit system.
Controversy over fund management has simmered amid nationwide debate over public pension funding.
Transparency advocates argued that the fund, which holds no public meetings, is essentially a public agency because of the vast sums the MBTA provides it. According to Boston think tank Pioneer Institute, taxpayers funneled $1.1 billion to the MBTA in fiscal 2013 and the T that year contributed $55 million in that year toward pension costs.
"Pioneer welcomes Mulhern's resignation, which will save the fund $282,000 a year from his salary alone," said Pioneer senior fellow for finance Iliya Atanasov. "We call on deputy director John Barry and the 'independent' board member Katherine Hesse to resign as well, clearing the way for reform."
A report that Bernard Madoff whistleblower Harry Markopolos co-authored last year with Boston University finance professor Mark Williams said the fund may be overestimating its value by roughly $470 million, or 29% of fund value. The fund refuted the study in its own report.
In 2014, the fund revealed that it lost a $25 million investment in an apparent Ponzi scheme through a hedge fund run by bankrupt Fletcher Asset Management.