Pension fund still plans on pursuing state legislation
Dallas police and firefighters rejected the $2.3 billion Dallas Police & Fire Pension System's proposed benefit changes in a two-week election that ended Saturday.
Only 45% of members approved the changes; 65% approval was required.
The rejected changes included raising employee and employer contributions and reducing cost-of-living adjustments and DROP benefits.
Those changes alone were projected to extend the pension fund's insolvency date to 2030, from the currently projected 2027. On top of the benefit changes, the pension fund was requesting an additional $1.1 billion one-time cash infusion from the city to help it achieve permanent solvency.
The proposed reforms were first introduced by the pension fund in August and were expected to extend the pension fund's insolvency date to 2041, but roughly $500 million in withdrawals from the program's Deferred Retirement Option Plan since then reduced the reforms' effectiveness, Kelly Gottschalk, executive director, previously told Pensions & Investments.
The pension fund said in a statement on its website Sunday that it still plans to submit the reforms to the Texas Legislature for review and action in the 2017 session, and will continue to work with the city of Dallas to help secure the pension fund.
“The decision by members of DPFP to reject proposed plan amendments does not change the mission of DPFP and its members, board and staff. DPFP remains committed to making the necessary adjustments to ensure that Dallas' first responders can rely on the retirement benefits they have earned,” the statement said.
Earlier this month, the city proposed its own set of reforms aimed at bringing the pension fund to full funding in 30 years. Like the pension fund's plan, the city's plan called for raising employee and city contributions, and reducing cost-of-living adjustments and DROP benefits. However, the city's plan also called for taking back the interest earned by retired and active DROP participants, which Ms. Gottschalk said the pension fund was against.