New numbers made public for the first time show the Dallas Police and Fire Pension Fund could be out of cash as early as January.
Retirees are pulling out their money at the rapid rate of $20 million dollars a week instead of the typical $2 million. Board members openly discussed the run on the bank at a Thursday meeting.
“We need to do what we can to keep the money in the plan,” said chair of the pension fund Sam Friar.
Pension trustee and Dallas councilman Scott Griggs crunched the troubling numbers.
“How many more weeks of liquidity? Because my estimate is 15 or less weeks before we have to sell things out,” Griggs said.
If the pension fund has to start selling off its non-liquid assets, such as real estate, the fund would get pennies on the dollar. That would exacerbate an already dire situation.
But the fund's executive director Kelly Gottschalk said she does not think the fund will run out of cash so soon.
“That assumes all the drop money goes out. That is that scenario. That is not the scenario we think is most likely,” Gottschalk said.
The fund's consulting actuary did say if nothing changes the fund is now set to be insolvent in just 10 years --three years earlier than last predicted.
The board worked on Thursday to draft changes to the plan that will help extend its solvency only by about three years. But unless the number of retirements slows down, the fund could run out of cash before the plan changes would even take effect.
Under a more positive outlook, with fewer retirements the changes could extend the fund until 2040.
But ultimately, the City of Dallas may have to step up. But so far the chair of the pension fund hasn't gotten anywhere with city leaders.
“They've been talking with us, haven't made any commitments yet,” Friar said.
The fund needs about $1 billion dollars from the city to get back on track.
“Bottom line we need a police force and fire department to run this city. If we did not have a pension plan, I don't know what the result of that would be,” Friar said.