The $1.5 billion pension fund has 5,786 bus and train drivers, track workers, and other employee members. But the number of retirees who participate in the fund — 6,685 — is greater, making for lopsided finances.

The shortfall is due not only to mediocre investment returns but also to a serious math problem.

The MBTA Retirement Fund will need $1 billion in additional taxpayer funding over the next 18 years if it is to pay retirees as promised and remain solvent, according to a report the transit authority’s chief plans to present at a public meeting Monday.

Over the last 10 years, benefits paid to retirees have exceeded money coming in from the taxpayer-funded transit authority and worker contributions, as well as gains on investments, said Brian Shortsleeve, the T’s chief administrator and acting general manager.


“The T will not have the internal resources to fund this,’’ Shortsleeve said. And, he added, “We certainly would not expect our riders to fund a bailout of this size.”

The dire pension report comes as the T itself is working to recover from years of financial woes and aging infrastructure that nearly crippled its operations two years ago.

Options for addressing the funding gap range from modifying pension benefits, such as taking into account the T’s contributions to Social Security for its workers, to curbing capital improvement plans or asking the Legislature for fare hikes or cash infusions.

The latter two possibilities “are not good options,’’ said Senate minority leader Bruce Tarr, a Gloucester Republican. “This is one of the most important issues facing state government right now.”

The pension system, which runs as a private trust but depends on the T and taxpayers for 73 percent of its contributions, also has been under scrutiny for its secrecy, failure to disclose failed investments, and accounting practices that masked its growing liabilities.


The T’s annual contribution to the pension fund this year is $87 million, up from $37 million in 2007. That trend is expected to continue, putting greater pressure on the T’s budget. By 2027, the contribution will reach $160 million a year, according to the report, and in 2035 it will hit $230 million.

The pension fund currently has enough money to meet 58 percent of its long-term obligations to retirees, a level that already is below the 60 percent threshold many in the industry use to judge a pension system’s health.

In 2007, before the financial crisis, it was 92 percent funded, with $1.9 billion in assets.

If nothing changes, the pension’s funded level is likely to fall below 50 percent within five years, according to the T’s report, which was prepared with the help of outside actuaries and a financial consultant. All told, they found that the fund will need $3 billion in funding to meet its obligations through 2035.

Tarr is proposing a budget amendment to create an 11-person MBTA Pension Fund Sustainability Commission that would work on potential solutions to the funding crisis.

Taxpayers are under no legal obligation to bail out the fund, because of its status as a private trust. It’s a structure the fund’s board has defended in court multiple times (including in cases brought by the Globe in efforts to obtain public records).

If fare increases were imposed to cover $100 million in additional pension expenses annually, that could mean 25 percent surcharges for riders, according to the T’s report.


The cost of a monthly bus and subway pass would jump from $84.50 to $105.33. A single subway fare would rise to $2.80 from $2.25, according to the T report.

Fares are capped by the Legislature, so such an increase would require lawmakers to lift the cap.

The pension board declined to comment on the report.

Matthew J. Lee/Globe staff

James O’Brien, president of the Local 589 and a member of the pension fund board, said the T is presenting “carefully selected statistics” to paint a dark picture of the retirement fund’s outlook.

“It’s disappointing, once again, to hear MBTA leadership throw a bunch of numbers around with the goal of sowing fear among pension holders,’’ he said.

The pension system’s longer-term performance is strong, O’Brien said, adding, “The MBTA warns it may no longer be able to honor the promises it made its employees. Where I come from, a promise is a promise.”

Governor Charlie Baker and T executives are pressing the pension fund to turn over management of its investments to the state pension fund, run by the Pension Reserves Investment Management staff and board.

The state reported a 7.6 percent return last year on the $65 billion fund, slightly beating its target of 7.5 percent.

The T pension fund had a 6.2 percent return in 2016 — disclosed for the first time — missing its annual target of 7.75 percent.

Over the last three years, the T pension has had a 3.9 percent annualized return. PRIM’s annualized return for the same period was 5.3 percent.


Steve Crawford, a spokesman for the T pension board, said the 2016 investment performance had not yet been released to members and taxpayers because it’s preliminary and is still being audited.

He said the fund provided the unofficial figure to the T upon request.

The financial analysts who advised the T on its forecasts — consultant Evan Inglis and Cheiron, a Washington, D.C., actuarial firm — projected that future investment returns will be modest, perhaps as low as 4 to 5 percent annually.

Even if results exceed that conservative forecast, they alone can’t save the plan, according to the report. That’s because there’s a big liability bubble forming.

According to its estimates, the authority will need to pay out $2.1 billion in retiree benefits over the next 10 years — roughly half its total outstanding obligations.

“Hope is not a good strategy for this pension,’’ Shortsleeve said. “We need to take action.”

The report focuses in particular on more closely aligning the T pension plan with the retirement plan of other state employees.

For instance, the T’s contribution to the retirement of transit workers is roughly twice what the state kicks in for employees. That’s partly because the T contributes to Social Security for transit workers; Massachusetts state workers and teachers do not get Social Security.

As a result, T employees have richer retirement benefits than other state workers. For example, a teacher hired after 2012 who retires at age 64 with 25 years of service, at a salary of $80,000, would get a $41,000 pension. A T employee with a similar employment history would get a $49,200 pension, plus $19,800 in Social Security benefits, according to the MBTA report.


Any changes to the pension plan would be subject to collective bargaining agreements.

Beth Healy can be reached at beth.healy@globe.com. Follow her on Twitter @HealyBeth.