Turnpike Authority Retirement Board

Fully-Funded At Its Creation

MAY 2006 - When the first shovel full of dirt was moved on January 24, 1955, few could fully realize the impact the Turnpike Authority would have on travel across the Commonwealth.

In today's modern world of construction delays and cost overruns, it is noteworthy that the original Turnpike (West Stockbridge-Newton/Weston) took just over two-years to complete.

In the post-war years, the slow paced back roads of Massachusetts had outgrown their effectiveness for East-West travel. By the early 1950s, plans began to develop for the creation of a special authority charged with constructing and managing the new road system.

Unlike other roadways across Massachusetts, the Turnpike (Rt. 90) was specifically established as a self-sufficient entity, which receives no federal or state funding. As a result, the Turnpike is completely funded by the revenues it generates from tolls ($244.1 million in 2003) and other sources (land leases).

From the Turnpike extension, which brought the Pike into downtown Boston, to the Callahan Tunnel, and more recently the Ted Williams Tunnel, the scope of the Authority's role in public transportation has grown over the past sixty-one years. In 1997, the Legislature turned the management, as well as financing of the "Big Dig", over to the Authority as well.

While the Turnpike's workforce has fluxuated over the years, in 2005 the Authority had some 1,258 active employees, with 688 retirees.

Coming Together

Created July 1, 1968, the Turnpike Retirement System was one of the first Massachusetts public retirement boards to reach a status of full-funding. As is the case with the state's other authorities (Mass Port, MA Housing, and MA Water Resources Authority) the Turnpike's retirement system was fully funded at its creation.

As a public entity, the Turnpike Authority provides the same retirement benefits as all other MA public agencies. The only exception is the MBTA, which operates in a quasi-private manner offering its own retirement plan, which is not governed by nor compatible with Chapter 32, our public retirement law.

The Turnpike Retirement System is governed by a five-member board, which is comprised of two representatives of the authority, two elected members, and a fifth member who is chosen by the other four from outside of the system. It was the seat of the fifth member, which had been a point of contention with the Board for many years.

During the, at times, controversial tenures of former Authority chairmen, an often contentious and adversarial relationship existed between the Board's appointed and elected members. Finding themselves at odds over the choice of a fifth member, the seat sat vacant for several years.

"At that time, it seemed that previous chairmen wanted to control the Board and had instructed his appointees to only support candidates for the fifth seat who would be beholden to the Authority," recalls longtime elected member Frank "Bingo" Hoey. "All that changed with Matt Amorello (current chairman). The criticism of the Big Dig aside, Amorello has been good to the retirement system, and we were finally able to agree on a fifth member. Matt has helped restore the system to a very good position."

Domenic Tringale, who is the Authority's chief financial officer, serves as chairman of the retirement board. He is the system's ex officio member and has 3 years with the Turnpike, having previously worked for the MA Highway Department. Tringale lives in Billerica.

The Authorities second appointee to the Board is Personnel Director James Esposito, Jr. Having worked for the Turnpike for 3 years, Esposito, a Holden resident, has served on the Board for the same amount of time. He previously worked for the MA Medical Society.

One of the longest serving retirement board members across the state is Frank Hoey. Known as "Bingo" to his friends, Hoey has served as the first elected member for over 37 years, having been one of its original members. This World War II veteran and Jamaica Plain resident also serves on the executive board of the MA Association of Contributory Retirement Systems.

Gerald Coughlin, who is now in his second term as the second elected member, is the retired director of the Board. Coughlin, who lives in Plymouth, is also our Association's treasurer.

Rounding out the Board as the system's fifth member is David Grenon. A resident of Sutton, Grenon is the retired president of the Protector Group.

Running the day-to-day operations of the Board is Executive Director Thomas Arcadipane of Boston. Arcadipane has nearly 10 years of experience with the Board. Previously, Arcadipane served the Boston Retirement System for over thirty years. He works closely with the Association on a variety of issues and is the go-to-guy for the system's members.

Serving under Arcadipane is Brian Bowler, of Medford, the manager of financial operations, and the Board's Retirement Analyst Kathleen Kiely-Becchetti.

Strong Investments

A rare public acknowledgement of a job-well-done came this past winter in the form of a nomination for Small Public Pension Plan of The Year, by the national publication "Money Management Letter." Even with the recent ups and downs of the investment market, the system is over 90% fully funded.

"We have a good board and a great staff here at the Turnpike. With over $200 million in assets, the Board has done an excellent job of growing the system's assets," explains Arcadipane. "At the same time, the Board has been there for our members, approving every COLA, granting veterans benefits, and so forth."

The system's success stems from its strong investment performance and asset diversification. From 1985-2004 the system returned an average of 9.74%, well above its targeted rate of 8.5%. Arcadipane states further that, "The investment program is centered around two globally diversified portfolios, the PRIT and Mellon Capital. Equity managers include The Boston Company, Cadence Capital, Cooke & Bieler, Longwood Investment Advisors, and Brandywine-International Equity. Fixed income managers include Wellington and PIMCo. All the firms were selected through a competitive bidding process.

The system utilizes Joe Miletich of New England Pension Consultants as an investment advisor. State Street Bank is the custodial bank, while Segal provides actuarial services. Nicholas Found serves as the system's attorney.