The executive director and counsel of the MBTA Retirement Fund defended the secretive practices of the $1.6 billion fund, which manages the retirement accounts of Massachusetts Bay Transportation Authority employees.
"Folks will criticize us for not being forthcoming or willing to participate in the public discussion, the public discussion has never been fair," executive director Michael Mulhern said Tuesday at a hearing of the state legislature's joint committee on public service.
"It's been a total onslaught to the trustees, the management of the fund, and the members of the fund who are often criticized as having these grossly generous pensions and when you listen to the actuary the exact opposite is true," Mulhern said before a standing-room-only crowd.
The fund has come under fire the past year after refusing to release pension data in the face of a state law the required it to do so, and after admitting in November that it lost a $25 million investment in an apparent Ponzi scheme through a hedge fund run by bankrupt Fletcher Asset Management.
The MBTA, not the fund, released some pension data last summer that showed 17% of 6,359 listed people retired while in their 40s. The fund operates separately from the MBTA.
On Thursday, the fund provided some 2013 payroll information to the MBTA, which released it to the Boston Herald. It showed the addition of 170 pensioners ranging in age from 38 to 81 were added, with a top benefit of $68,238 a year.
Mulhern and attorney Tom Kiley asserted that the fund is a private trust, backed by state Supreme Judicial Court rulings that the fund is not a state agency.
"The fund and the board are private entities, the position that the fund had always taken arising from the historical documents," said Kiley, a veteran Beacon Hill lawyer.
But critics say the fund is de-facto public, given that taxpayers funneled $1.1 billion to the authority in fiscal 2013 and that the "T," as locals call the system, contributed $55 million last year toward pension costs.
"This is a big money issue," said Gregory Sullivan, research director for Boston think tank Pioneer Institute and a former state inspector general.
Pioneer senior fellow Iliya Atanasov told the committee that poor transparency of the retirement fund is a root cause of what he called a structural crisis at the MBTA, whose debt service of roughly 33% is ranks as the highest in the country among transit agencies.
"Pioneer had warned about the potential impact of the festering governance issues at the MBTA Retirement Fund weeks before the $25 million loss at Fletcher Asset Management was made public by the press," Atanasov said.