by Iliya Atanasov
Pioneer Institute for Public Policy Research
November 26, 2013
The Massachusetts Bay Transportation Authority (MBTA) has been notoriously secretive about its retirement plans. Only recently did the MBTA Retirement Fund (MBTARF) release a database of retiree benefits – and after the state legislature mandated the disclosure. The T’s financial statements raise much more troubling questions about the sustainability of the MBTA Retirement Plan. Public retirement plans are particularly susceptible to political interference because they are an easy and hidden source of borrowing for fiscally challenged governmental units. Undercontributing to the plan can be a temptingly easy fix to patch up a budget burdened by irresponsible spending or tax cuts. Oftentimes benefits are simply too generous or leave too many loopholes that can be exploited by plan members. The minimum retirement age is simply too low.