The Dallas Police and Fire Pension (DPFP) is facing a financial crisis once again. The pension program, which was reorganized in 2017 after nearly collapsing due to years of apparently risky investments made by those previously managing the program, is seriously underfunded, as WFAA reported.
The City of Dallas addressed the state of the fund during a Government Performance and Financial Management Committee (GPFM) meeting on Tuesday, examining the data and highlighting the challenges faced by the pension that provides retirement, death, and disability benefits to police and firefighters.
Councilmember Cara Mendelsohn, chair of the GPFM committee, said the goal of the meeting was not to discuss solutions but rather to brief the committee on the most recent data regarding the program.
“For now, we’re just trying to make sure we’re all on the same page, so we can all talk about it in a reasonable way,” she said.
DPFP Executive Director Kelly Gottschalk presented a financial report to the committee based on data compiled in January 2022.
She stated that the program had accrued $5.2 billion in total liability with $2.2 billion in assets, leaving $3 billion of unfunded liabilities.
Only 41% of the pension actually has funding behind it.
Gottschalk indicated that the problems with the fund are likely to worsen. The performance of the stock market, inflation, and not meeting hiring requirements are all factors contributing to the shortfall in the fund, according to the DPFP.
The Texas Pension Review Board (PRB) requires all pension funds to be fully funded within 30 years. However, projections indicate the program will not reach full funding until 2090 — 68 years from now.
“Obviously not where we want to be, but not a big surprise,” Gottschalk said.
She added that payroll projections may not be achievable if adjustments are not made, and she is working on a letter to send to Mayor Eric Johnson to request more contributions for the pension fund.
At the end of the meeting, Mendelsohn said the status of the pension will be added to the agenda for further discussion. Dallas police and fire employees, including those who have retired, will be invited to a future public session to discuss solutions.