Participant voting on a pension reform plan for the $2.8 billion Dallas Police & Fire Pension System is on hold after a temporary restraining order was issued by in Dallas County district court.
Judge Ken Molberg issued the restraining order Sunday.
The restraining order was requested by five members of the police and fire departments who are suing the retirement system for maintaining a board of 11 to 12 trustees, allegedly violating state law that calls for seven trustees. Their lawsuit was filed Sunday.
The pension reform package, proposed by the pension fund, called for raising employee and city contributions, reducing cost-of-living adjustments and changes to the retirement system's DROP program.
Member voting on the changes was scheduled to start Monday and run for two weeks. At least 65% of members must approve the changes.
A hearing on this issue is scheduled for Dec. 1.
The pension fund reported about $6.9 billion in unfunded pension liabilities at the end of 2015, a 40% increase from the previous year, due primarily to realized private equity and real estate losses, according to Fitch Ratings. In a July 21 report to the pension fund board, actuary Segal Consulting said that the plan could become insolvent in 2030 unless changes are made to the system's benefit provisions or member or city contribution rates. High withdrawals from the pension fund's DROP program in recent weeks could bring insolvency sooner, the pension fund said.
Fitch and Moody's Investors Service lowered Dallas' general obligation bond rating in October, citing the city's unfunded pension liabilities and high withdrawals from the police and fire system's DROP program. Unfunded liabilities at the city's other pension fund, the $3.3 billion Dallas Employees' Retirement Fund, more than doubled in 2015 to $2.2 billion, according to Fitch
On Nov. 8, Dallas voters approved a ballot imitative to reduce ERF's long-term liabilities by roughly $2.15 billion over the next 30 years. The ERF initiative, which applies only to employees hired on or after Jan. 1, reduces cost-of-living adjustments and survivor benefits, raises the retirement age and discontinues a monthly health benefit supplement.
Kelly Gottschalk, executive director, was not immediately available for comment.
