A surge of retirements prompted the Dallas Police and Fire Pension Fund to hold an emergency meeting on Monday.
The emergency meeting drew a full house of mostly retired firefighters and police officers. The board of directors for the troubled fire and police pension hoped to quell a surge of retirements and retirement fund withdrawals.
"Many of you are worried about the actions,” said Police and Fire Pension Chair Sam Friar. “You are worried about the sustainability of this fund. We get it.”
The worry centers around so-called drop funds, a special account that allows firefighters and police officers of retirement age to keep working full time while receiving pension payments called the deferred retirement option plan, which earns a guaranteed return.
In recent months, Dallas has seen a surge in retirements and people taking their drop money elsewhere – further endangering a pension fund already deemed the most troubled in the state.
After more than three hours in closed door executive session, the board emerged before a restless crowd. There may have been dispute behind closed doors, but the public vote was unanimous – not to change or restrict withdrawals from drop accounts. The board pleaded with retirees not to panic and bring a pension fund down.
The fund is facing a $3 billion shortfall and without drastic changes could be insolvent by 2030, leaving nothing for men and women still working.
"The more they pull their money, the worse the situation gets,” said Friar. “We're trying to allay those fears. We still have money available. People don't have to run down and think that the bank is closed. It's not closing."
Reaction among retirees was generally favorable, but mixed.
"I've got to pray about it. I've got to talk to my financial advisor and decide what am I gonna do,” said retired Dallas Police Officer Nancy Webb. “Am I going to pull a little out or am i going to leave it there? I can't give you an answer right now."
Friar made it clear the ultimate solution is in the hands of the city council and with taxpayer money.
"We're going to have to get some cooperation from the city to take this thing out of the hole,” said Friar. “We cannot do it ourselves."
The Police and Fire Pension Fund spent almost a decade basing its financial health on inflated assets from risky real estate investments.
The Texas Pension Review Board now says their actual worth makes it about 45 percent funded. And according to its current executive director, about half of its assets are now in those deferred retirement funds. The situation is dire.