Boston Transit Workers' Pensions: a Win for Transparency

Information about the pensions for employees of greater Boston's transit agency has been hidden from the public. Now it's a matter of public record.
by | July 16, 2013

It doesn't happen often, but every once in a while the good guys win one. Massachusetts taxpayers are currently getting to savor one of those victories.

In April, I wrote about how information about the pension fund of the Massachusetts Bay Transportation Authority (MBTA) -- the Boston area's public transit agency -- did not have to be made public thanks to two rulings by the state's highest court that the MBTA Retirement Board is a private trust and therefore exempt from public-records laws.

Want more management news and commentary? Click here.

The story, which was broken by the Boston Herald, subsequently caught fire. The state Senate voted to make the pension fund public, and last week Gov. Deval Patrick signed a similar provision that was included in the state budget.

Another part of the budget Patrick is still haggling with lawmakers about makes the MBTA pension-transparency provision even more critical. The spending plan includes $800 million in new taxes to shore up Massachusetts' crumbling transportation system. Patrick proposed a package that would cost just over $1 billion annually; the legislature countered with a smaller plan, which it subsequently increased.

Whatever the final amount, much of the new money will go to the MBTA, which is buried under nearly $8.9 billion in debt and interest and faces a deferred-maintenance backlog of more than $3 billion.

A 2009 state transportation-reform law addressed some of the issues that make MBTA labor costs among the highest of any major American transit agency. But because the authority's retirement board isn't considered public, its pension system remained largely unchanged.

Perhaps the biggest problem with that system is that, unlike for state workers, MBTA employee pension contributions are subject to collective bargaining. The result is that while state employees pay about 10 percent of their salaries to fund pensions, MBTA workers contribute far less, shifting more of the burden to taxpayers and riders. Since 2007, the authority's annual pension contribution has risen from $30 million to $55 million.

Given the impending increase in their investment in the MBTA and other transportation agencies, state taxpayers should at least know how the authority spends its pension dollars. Now they finally will.

Join the Discussion

After you comment, click Post. You can enter an anonymous Display Name or connect to a social profile.

More from Better, Faster, Cheaper