DALLAS - The Dallas Police and Fire Pension board voted to freeze distributions from the deferred retirement fund known as DROP on Thursday.
The Deferred Retirement Option Program has paid out half a billion dollars in lump sum distributions over the past three months. Of the 3,067 active accounts, over 500 of them are worth at least $1 million.
Pension officials said freezing the run on the bank was the only way to keep the pension fund operating.
After Mayor Mike Rawlings filed a lawsuit Monday as a private citizen with his personal money, a record number of withdrawal requests came in. A judge also issued a freeze of her own as a result of his lawsuit.
The fund’s director said the more than $154 million in requested payments would officially sink the sinking ship. It's down just over $2 billion in total assets.
"Without the mayor's suit, this decision would not have been made today,” said Councilman Scott Griggs, who is also a pension board trustee.
Officers and firefighters at the meeting were livid at the board’s decision to cut off access to the money.
“When you take something from someone without their permission, they call that theft. This is called theft by conversion. I think it's criminal what you're doing,” said retired DPD Sgt. Pete Bailey. “You're doing it to a group of people who have given their entire lives, safety and security is not free. It's paid for every day with the blood sweat and tears of the Dallas police and fire department.”
"It's like watching your kids fight and one is going to ask Mom and one is going to ask Dad. And you're sitting there watching them make a mess of things,” said Dallas Police Association President Frederick Frazier. “But the problem with this is people’s lives are at risk.”
With the pension fund already facing huge deficits, Rawlings wanted the DROP accounts frozen before considering the board’s request for a $1 billion bailout from the city. Any help from the city would likely mean big tax hikes for homeowners and a restructuring of benefits for police and fire personnel.
Rawlings said he appreciates the board's decision to freeze DROP disbursements.
"The tourniquet has just been put on we still need to get the ambulance in here, get the doctors to work on the patient, and get that patient healthy to the next level. There's still a lot of work to be done now,” Rawlings said.
The board's decision on freezing DROP is just temporary. It plans to come up with a new policy for how much people can withdraw at a time in January.
“All of this is going to fix or destroy itself by the end of the session,” said Frazier. “The big showdown is going to be in Austin. Hopefully these two entities, the pension board and the city, can get their sh** together, and you can quote me on that. And they can sit down at a table like adults and get something together to take to Austin to pass.”
The pension board will meet again on Jan. 12. Between now and then, the plan is to come up with a new policy for how much retirees can withdraw at a time.
A judge will decide on Jan. 17 whether to lift the temporary restraining order put in place or could order a temporary injunction. If she does that, the board's hands will be tied when it comes specifically to the DROP fund until case goes to trial.