Carmen’s Union calls for audit of MBTA pension plan

Boston Globe | By Beth Healy | July 2, 2015

9501bb7d3d104bf9ba8476fb9731e87b-9501bb7d3d104bf9ba8476fb9731e87b-0Two top officers of the Boston Carmen’s Union, Local 589, who serve on the MBTA pension fund board, issued a statement Thursday calling for “an immediate, open and complete audit” of the retirement system for transit workers.

According to the statement, by president James O’Brien and treasurer James Evers, the Local “remains supportive” of a review of the $1.6 billion fund in the wake of a critical report by Wall Street whistleblower Harry Markopolos, alleging as much as $470 million in questionable accounting and reporting practices.

“While we have not seen nor read the outside audit by analyst Harry Markopolos and Boston University Professor Mark Williams, which generated the recent concern, we want to make absolutely clear that we stand with former state Treasurer Steve Grossman and others in favor of an independent review, which will either verify or refute the audit’s findings,’’ the statement said.

The Markopolos-Williams report, which the Globe reported on last Sunday, questioned the accuracy of the fund’s posted investment returns, as well as the methods used to calculate its assets and its long-term obligations.

The authors presented their findings last week at a meeting with members of the US Attorney’s office, the Securities and Exchange Commission, the FBI and state Office of the Inspector General.

A spokesman for the pension fund board has said the panel stands by its reported results and accounting of its assets and liabilities.

Grossman, who as treasurer served as chairman of the much larger state pension fund, is one of three new appointees to the T pension board by Governor Charlie Baker. Grossman said he will urge the board to do an independent review and to fully disclose its finances.

The T pension fund’s status as a private trust makes it unique among Massachusetts plans for public workers. The staff and board have long used that status as a reason to not open meetings to the public and to withhold records other pension plans disclose.

The statement by the Carmen’s Union officials is unusual because board members rarely make public comments. There are a total of three union members on the board, along with the three new “management” representatives named by Baker. A seventh person, lawyer Katherine Hesse, serves as a tie-breaker when the votes are even.

Beth Healy can be reached at beth.healy@globe.com. Follow her on Twitter @HealyBeth.

Permanent link to this article: https://carmensunion589.org/2015/07/carmens-union-calls-for-audit-of-mbta-pension-plan/