MBTA pension liability growing, despite added contributions

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http://www.bostonglobe.com/business/2015/10/27/pension-liabilities-growing-even-state-contributes-more/0ZXm9BRxpYb3crikKdJ9pM/story.html

Investment return for ‘14 below target

MBTA pension liability growing, despite added contributions
By Beth Healy Globe Staff October 28, 2015

The MBTA pension fund is falling further behind in saving for the retirement benefits of its members, putting pressure on the transit authority to increase its contributions at a time when it faces massive costs to upgrade the system after last winter’s storms.

The unfunded liability of the MBTA retirement system swelled nearly 8 percent last year, to $816 million, according to a draft financial report released by the transit authority. The deficit is growing even as the MBTA has upped its annual contribution from $53 million in 2012 to $77.5 million this fiscal year, a 46 percent increase in four years.

“I would expect that the contributions would continue to increase,” said Iliya Atanasov, founder of MoneyFact , a blog where he posts research on the T pension fund. He is also a senior fellow at the Pioneer Institute in Boston, a think tank that has been critical of the transit service.

The $1.6 billion pension fund’s financial position was probably not helped by an estimated 5.5 percent investment return for 2014, below its annual target of 8 percent.