The Massachusetts Bay Transportation Authority’s Police Association Retirement Plan overpaid 24 employees by more than $470,000 between 2005 and 2018, according to the state inspector general’s office.
“The plan overpaid retirees because it had poor internal controls and no system to terminate payments when retirees were no longer eligible for the benefits,” Inspector General Glenn Cunha said in a letter to the plan’s board of directors.
Upon learning of the problem, Cunha said, the plan’s current director, Janet Rivard, has worked with the board to establish payment plans for all overpaid retirees.
The $94.5 million plan is one of two pension systems that serve employees of the state-run MBTA, which operates Greater Boston mass transit.
It serves employees of the MBTA Transit Police Department who belong to the MBTA Police Association and who do not belong to the $1.7 billion MBTA Retirement Fund. The latter has come under fire over the years over
The MBTA contributed nearly $16 million from 2014 through 2019, including $3.3 million in 2019. Rivard declined comment.
“I have not been authorized by the board of the MBTA Police Association Retirement Plan to respond to questions concerning the OIG’s report,” she said.
Police plan members who choose an early normal retirement may receive supplemental benefits until age 62. To be eligible, an employee must retire at or after 52 and have at least 23 years of service. The supplemental benefit is designed to augment income until eligibility for Social Security benefits.
According to Cunha, the plan failed to stop benefits when employees turned 62. He said the outgoing executive director told Rivard of one overpaid retiree.
“Ms. Rivard looked further and, upon learning that the plan did not have an adequate system to discontinue supplemental benefits at the appropriate time,” Cunha said. Rivard, he said, found other additional retirement and disability overpayments that exceeded $470,000.
The board then established payback schedules and according to Cunha, each overpaid retiree has either fully repaid or is repaying through monthly deductions.
Cunha recommended that the plan train personnel on fiduciary responsibilities of public boards and commissions, document internal controls and employ a “more robust” annual audit.
