DALLAS - Newly released data shows a record number of Dallas police officers and firefighters are retiring to withdraw pension funds. Experts say it’s only a matter of time before that fund runs out.
The numbers show the police and fire pension has hemorrhaged more than 10 percent of all of its assets in only six weeks. The number of people hanging up their hats at the Dallas Police Department next month is more than six times the number who retired last October.
And as people are retiring, they're taking hundreds of millions of dollars with them. Those who have already retired have been taking out their money too.
“I withdrew all my money from my DROP account because I no longer trusted these people to have my money,” said Rodney Spain, a retired Dallas police officer.
“I'm frustrated. I worked 33 years,” said Frank Gamez, a retired firefighter. “The veterans before us did this for us. They said don't ever lose it. Now we're losing it."
SMU Economist Mike Davis says what's happening is a big problem.
“What we are seeing is a lot like a run on the bank. Even a strong solvent bank can't stand it when everyone wants to take all their money out at once,” he explained. “This pension fund is not strong, and it's not solvent. So when the members start knocking on the door saying we want our money now, it puts a tremendous strain on the pension fund.”
In just six weeks, there have been $300 million in withdrawals from the pension fund. Davis says if that keeps up, the board will have to dig deeper into their portfolio to liquidate whatever assets they have.
“It's deadly for a pension fund that's made long-term investments to have to sell short term to generate cash,” Davis explained. “That appears to be what they might have to do."
To try to save the police and fire pension fund, the city of Dallas is going to the state for help.
City Councilman Lee Kleinman, who testified before the house pension committee on Thursday, says the city will work to change state law to increase the amount of money the city and members can pay into the plan and change the rules of who can be on the board.
Right now, the board is limited to councilmembers, police officers and firefighters. Kleinman believes there should be financial managers on the board.
If the city provides a bailout, it would be in exchange for the city having more control over the pension fund.
“I want to reassure members and retirees that we are here to support the system, and we are not going to let it fail,” said Kleinman.