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.
What’s even worse is DPFP are lower in pay than other cities around Texas. Once again a liberal city ruining things, and guess who’ll be left paying to get things right?
Who exactly is responsible for running this program (insert names here) The stock market was on fire until 2 years ago. Think about that as well. Elections have consequences.
The individuals running the fund made extremely poor investments several years ago that caused significant losses. This included condominium projects in Hawaii and land development deals in Arizona, both of which lost 100% of the investments. The AZ deal if I remember correctly never received the zoning necessary and was a total loss. The Hawaii condo development was a way for the pension managers to do “property inspections” every six months or so in Hawaii. It was sickening to see. – Former State Representative
?? – SOMEONE appointed members and people to make decisions – they wanted BIG RETURNS – they are all adults – they gambled – they lost – risk has consequences – WHO will bail out YOUR back investing decisions ?
Well, if you want an idea of just why the DPFP is in a financial crisis, just watch the first 30 minutes or so of the meeting pertaining to the discussion of the DPFP. (click on “Meeting”) You’ve probably heard the definition of a camel? – it’s a horse built by a committee. The bureaucracy will never solve the problem because they will never understand it and if they do they will never approve actions to solve the city’s problem because it is going to be to politically problematic and it will require the approval of too many with no stake in the outcome of the Plan. The plan participants need to get a legal team formed now and get some funding from the city for their past incompetence and have the leadership of the board appointed by a newly formed plan participant committee. The board has 6 members, the majority, appointed by the Mayor – unacceptable!
I’d suggest they investigate the fund’s leaders going back some time and hold them accountable for the risky investments. Those fund managers were/are getting paid a lot more than first responders to professionally manage that fund!
Nobody was held accountable or the Board Members with DPFD who were public record. Yet many are still living their lives able to retire off this fund along while Dallas citizens are picking up the tab for mismanagement for years, same or similar elected representation.