Dallas police, fire pension in crisis, retirees concerned
DALLAS—Still recovering from the July sniper attack that left five law enforcement officers dead, the Dallas Police Department is facing a new crisis as its pension fund approaches insolvency and scores of officers, including Chief David Brown, announce unexpected retirements.
The crisis comes as the Dallas Police Department negotiates with City Hall to raise pay and build its ranks, which union leaders say have been depleted by low pay and poor working conditions. There are currently 3,355 officers in a department that once had 3,600.
Problems with the Dallas Police and Fire Pension system have been simmering for years and were coming to a head when the July 7 sniper attack temporarily united the city. But, in recent weeks, the pension crisis has boiled up again because of fears about the system’s viability and pleas for calm from fund administrators.
Brown, who received national acclaim for his handling of the sniper attack, surprised the city on Sept. 1 by announcing his retirement, effective Oct. 22. He then moved up his retirement date to Oct. 4, saying he wanted to take advantage of “time-sensitive opportunities.” He did not elaborate.
The head of the department’s largest police union did elaborate on his pension concerns when he announced his retirement, also effective Oct. 4.
“I wanted to make sure that I was able to move it and get it invested somewhere safe,” the outgoing president of the Dallas Police Association, Ron Pinkston, told local TV. “I don’t know anything anybody else doesn’t know that has been doing their homework. And hopefully everybody that’s in my position, that’s thinking about it, is doing their homework, is checking their numbers.”
In a statement, Pinkston also accused city leaders of “running off talented officers” with bad pay and benefits and warned that “Dallas is on a dangerous path toward a future marred with fear and violence.”
The police and fire pension fund spent almost a decade basing its financial health on artificially inflated asset values from risky real estate investments, according to its executive director. After devaluing those assets to reflect actual worth, the plan is about 45 percent funded and projected to run out of money in less than 15 years, Texas Pension Review Board numbers show.
More than half of the system’s $2.5 billion in assets are in deferred retirement funds, according to Kelly Gottschalk, who took over in 2015 after the fund’s previous executive director resigned over the investment scandal.
Pension leaders expected some retirees to withdraw their deferred retirement funds early when proposed plan fixes were announced, Gottschalk said, but the numbers have been greater than expected.
“People are reading a lot into the chief moving his date up. Mr. Pinkston deciding to retire … then saying he did it to move his money certainly isn’t going to help the situation,” Gottschalk said.
But in a statement issued after a special meeting Monday, the police and fire pension board appealed to plan participants to “not take actions that in total will ultimately cause further damage to the fund and your long-term benefits.”
“As more people withdraw funds from the (pension) system, our long-term solvency will become much more challenging,” the statement said.
Since Aug. 11, “when proposed plan amendments were first discussed,” about $220 million in deferred retirement option plan payments have been made with an additional $82 million requested since last Wednesday. In a typical month, plan officials might expect to process 14 retirements. In the month leading to the Oct. 13 board meeting, more than 80 retirements are expected, according to the board statement.