T pension progress

In his budget plan released in February, Gov. Charlie Baker proposed transferring management of the subpar MBTA retirement fund to the more professional, more successful state pension system. It is encouraging that House leaders are now on board, and it ought to be a message to T pension fund overseers that change is a good thing.

In its $40.3 billion budget plan released this week, the House adopted the language proposed by Baker — which authorizes (but does not require) the Pension Reserves Investment Management board to manage the T’s retirement investments.

The lack of a mandate is because of the way the T’s pension fund is structured — as a private trust, which historically has enabled the fund’s board to shield much of its activity from public view. That might not be so galling if taxpayers weren’t forced to subsidize MBTA pensions to the tune of hundreds of millions of dollars (and of course T passengers and taxpayers pay the salaries of employees who contribute to the fund).

In addition to its now-wellknown secrecy, the T pension fund has underperformed. According to the Baker administration its asset balance dropped 7 percent between 2005 and 2014 — at a time when the state retirement fund increased by 32 percent.

MBTA unions and retirees have long held tremendous power on Beacon Hill. But House leaders understand math. They understand what it means to carry a massive unfunded pension liability (in the case of the T pension fund it’s $1 billion). Lawmakers have not always made prudent decisions when it comes to the MBTA, but this is a good effort to turn that around.

Now the Senate needs to join the effort, and the T’s retirement fund board — and participants in the retirement system, who can bring the necessary pressure to bear — must be convinced there is value in pooling resources.