Retired Dallas officers, firefighters express fears after halt on DROP funds
DALLAS -- Three days after Mayor Mike Rawlings filed a lawsuit demanding a halt to the withdrawal of cash from the Dallas Police and Fire Pension fund, its board voted Thursday to do just that.
The board froze $154 million in withdrawals from pensioners' Deferred Retirement Option Plan accounts that were set to be paid out Friday. A run on the money in those accounts, known as DROP, was spurred by Rawlings' lawsuit filed Monday.
DROP withdrawals will be halted until at least January's pension board meeting, and could be off limits beyond that, officials acknowledged Thursday.
"The great news is that it gives us a chance to save this fund and I believe we can do this," Mayor Rawlings said after learning of Thursday's pension board vote. "So now the bleeding has stopped, we can turn this ship around."
DPF agrees to halt DROP withdrawals. pic.twitter.com/nuvuFG0OX7— Brett Shipp (@brett_shipp) December 8, 2016
"This is a full-blown six-alarm fire with an officer assist and you folks need to save us," said one retired firefighter.
Others shared their opinion that Rawlings' lawsuit only added to further withdrawals.
"The mayor is the reason for the run on the bank, not us," said a retired Dallas police officer.
While many shared their anger at the decision, one retiree stood up and thanked the board for halting the withdrawals and, at least temporarily, saving the fund.
Using his own money, Rawlings filed the suit the week after he sent a letter to the board with the same request -- halt withdrawals or else.
The pension fund, which is the only retirement option for most of Dallas' first responders because they don't pay into social security, is in a meltdown. Years of poor real estate decisions and overly-generous benefits for retirees have put the fund billions of dollars in the hole. On its present course, it will be insolvent in a short few years.
"Hypocritical board now has buyers remorse"...says upset retiree. "This is criminal." pic.twitter.com/dtF0mucb1v— Brett Shipp (@brett_shipp) December 8, 2016
As the financial health of the fund has gradually become known this year, retirees have withdrawn more than $500 million in DROP money from the fund, fast depleting it.
On Thursday, some retirees railed at the pension board for freezing members' withdrawals rather than taking steps in years past to preserve the fund.
"Hypocritical board now has buyers remorse," said an upset retiree. "This is criminal."
With the board's decision, it's unclear if Rawlings will go forward with the lawsuit.
On Wednesday, the Dallas City Council was briefed on city staff's plan for suggested cuts in police and firefighter retirement benefits. The city of Dallas does not control the pension board, but some city council members serve on the pension board.
The pension system's leadership has said publicly that it needs a billion dollar bailout from the city to stay afloat. Mayor Rawlings has said that's not possible, and that the pension fund will have to climb out of its own hole with limited city assistance.
If the pension board and city of Dallas cannot work together on a fix for the pension system, lawmakers will have to intervene.
Rep. Dan Flynn, Republican from Van, Tx., who chairs the Texas House Pension Committee, has met with both sides and has said he's hopeful that officials can work out a fix without a state bailout.
On Thursday, after the pension board's vote to freeze DROP withdrawals, Rep. Flynn released this statement:
"I appreciate the step the Dallas Police and Fire Board has taken to temporarily freeze withdrawals as a first step toward a joint, local plan that restore actuarial soundness to support retirees and current members on the job. I believe both sides can work together for a productive outcome that honors the service of so many who serve so well and ensures the continuation of a strong plan."