Dallas Mayor Mike Rawlings withdrew his request for a temporary injunction hearing to block withdrawals from Dallas Police & Fire Pension System’s deferred retirement option plan.
The hearing, scheduled for Tuesday, has been canceled. The withdrawal was made Jan. 13.
The mayor’s request for a temporary injunction was included in a lawsuit he filed against the $2.1 billion pension fund on Dec. 5, which argued that the pension fund was jeopardizing its solvency and liquidity by continuing to allow DROP withdrawals, including a record $523 million in withdrawals between early August and December.
To protect its liquidity, the pension fund board eventually voted Dec. 8 to temporarily suspend DROP withdrawals.
On Dec. 29, the fund board lifted the suspension on monthly withdrawals, but not lump-sum withdrawals, and on Jan. 12 unveiled a new withdrawal policy for members with outstanding DROP balances.
Under the new policy, retirees can withdraw up to $3,000 from their DROP accounts monthly, starting March 31. In any month, additional DROP funds may be distributed if the board determines that excess funds are available beyond what is required to meet its monthly benefit payments and other obligations.
For those with outstanding lump-sum DROP requests as of Jan. 12, the new policy also calls for $6.6 million total to be distributed on a pro-rata basis based on their requested amounts.
Mr. Rawlings said he withdrew his request for a temporary injunction hearing because the system’s “most immediate threat ... has temporarily abated” under the new DROP policy, which voids almost $200 million worth of outstanding DROP requests and keeps the system’s assets intact through the end of March.
Mr. Rawlings added, however, that his lawsuit will continue and that he could again seek injunctive relief if assets are sold to make additional DROP payments at the end of March or in the months following.