Dallas voters on Tuesday approved a ballot measure that raises the retirement age for new hires into the Dallas Employee Retirement Fund, cuts COLAs for those workers and tweaks the Fund’s benefit formula.
The changes are expected to save $2.15 billion over 30 years. The cuts work out to about $4,500 less in annual benefits (2016 dollars) for the workers to which the changes apply, vs. someone who is already in the Fund.
More from the Dallas Morning News:
The changes that voters approved will only affect new workers hired after Jan. 1, 2017, not current employees. Among the changes: new staffers will have to work until 65 — not 60 — to receive full retirement benefits. Cost-of-living adjustments will be capped at 3 percent, not 5 percent, and allow for different pension benefit calculations. A $125-per-month supplemental health benefit would be eliminated and survivor benefits would be cut.
Even with the benefit cuts, there is no guarantee the fund will stay in good financial standing. Taxpayers bailed out the fund in 2005, using debt, but the city hasn’t contributed as much as it could to pay off the debt. Shaky investments, including during the recession, have prompted more instability, and the ERF has collected hundreds of millions of dollars in unfunded liabilities — the amount of money it couldn’t afford to pay if all its members retired tomorrow.