The Dallas Police and Fire pension board have approved a plan that will fully pay back the troubled fund within 40 to 53 years. It will cost the city $22 million per year, and, unlike the plan put forth by the City of Dallas, it will not take interest from retirees’ Deferred Retirement Option Plan (DROP) accounts or cut benefits and raise contributions.
Left alone, the underfunded pension plan is currently on course to run out of money in 10 years thanks to a history of careless investments huge losses on real estate deals. The plan approved by the board today was put forward by state legislator Dan Flynn, who is chairman of the Texas House of Representatives Pensions Committee. The city and Dallas Mayor Mike Rawlings were pushing another plan which would have paid back the fund in 30 years, but drew criticism from retirees because it wanted to dip into their DROP accounts and tighten the belt on benefits. Police and firefighters are reportedly happy with the vote for Flynn’s plan:
“It allows us to recoup some of our money, even though it’s in a long-term plan,” said Joel Lavender, a retired Dallas fireman. “It may not be the best plan, but it’s a better plan than what the mayor wants to put forth. The Flynn plan, even though it’s only six months old, it shows respect for the police and firefighters who are retired.”
Now the pension board will present the plan to the state legislature before the end of session.