MA Retirement System Turns Over Asset Control to State

November 29, 2006 ( - A Massachusetts retirement system voted Tuesday to hand over the management of nearly all of its $700 million in assets to the state pension fund for three years.

The chairman of the Middlesex Retirement System board, Thomas Gibson, said in a statement that the shift to the state pension fund should reduce investment costs and “is in the best interest of our members and beneficiaries,” according to the Boston Globe.

The Middlesex system has been withstanding pressure by the Public Employee Retirement Administration Commission (PERAC), the Bay State’s public pension system regulator, to shift its assets to the state control since last year.

The push was prompted by an inspector general’s report released last year that revealed that the pension officials rigged construction bids to favor certain contractors with ties to board members (See   Massachusetts May Remove Pension Fund Board ). The bids were for the construction of the system’s new headquarters.

The Middlesex board tried to deter the investigation by PERAC by filing suit that questioned whether the commission has the authority to pursue the investigation. The suit called into question whether public pension funds are subject to fair bidding laws (See Massachusetts Retirement System Tries to Block PERAC Suit).