The board of the Dallas Police and Fire Pension Fund — one of the most underfunded plans in the country — approved a plan on Friday that attempts to improve the plan’s funding by cutting benefits and increasing contributions from workers and the city.
As the dwindling funding status of the pension fund made headlines this year, there was a “run on the bank” that saw Dallas’ public safety workers — fearful that their pension benefits were in jeopardy — retire and lock in their pension.
The “run” only exacerbated the pension fund’s issues.
WFAA 8 describes the plan:
The plan would increase the contributions of police and firefighters who are not in DROP from 8.5 percent to 9 percent.
The contribution of active police officers and firefighters who are in DROP would rise from 4 percent to 9 percent.
The plan calls for ultimately increasing the contribution to 12 percent by 2018, but that requires legislative approval and the city making it legally obligated to provide funding to the plan.
The city has already agreed to increase its contribution from 27.5 percent to $28.8 percent – the highest percent allowed by state law.
It would also spread the pain to retirees. They would see their cost of living adjustments drop significantly drop.
Police and firefighters vote on the plan on Monday, and 65 percent of them need to approve the plan for it to move forward.