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Dallas Police & Fire allows monthly DROP withdrawals to resume

Dallas Fire Truck

Dallas Police & Fire Pension System voted Thursday to lift the suspension on monthly withdrawals from its deferred retirement option plan, said Kelly Gottschalk, executive director of the $2.1 billion pension fund, in an e-mail.

To protect liquidity after a record $523 million in withdrawals over three months, the board voted Dec. 8 to temporarily suspend DROP withdrawals. A hearing Jan. 17 could decide whether lump-sum withdrawals may once again be permitted.

Ms. Gottschalk previously told Pensions & Investments that the level of DROP withdrawals in 2016 surpassed previous years and that withdrawals spiked after an Aug. 11 board meeting at which pension fund officials discussed reducing benefits to cut plan liabilities.

After the Dec. 8 suspension, five pension fund participants requested that at least the suspension on monthly withdrawals be lifted. A Dallas County District Court judge said last week that it was up to the pension fund board whether to lift the suspension on monthly DROP withdrawals.

For retirees who had requested a monthly DROP payment in December, those requests totaled roughly $2.2 million.