The City Employees Pension fund is a totally separate entity from the Police and Fire pension fund, and was controlled by a different Board of Trustees that made the choices of how and where to invest their money. At that time the board consisted of 4 rank and file members of the police and fire departments and 3 city council members and ,some labor consultant/advisers. They made huge investments in 17,000 acres of raw land in Idaho and also in Colorado with the plan to build subdivisions there that didn''t happen. They invested in South African lumber, Taxis, Asian infratucture projects, Nut farms, etc.. They set up the DROP fund years ago (deferred retirement option plan) which allowed the members to put their pension fund payments into that account at a guaranteed return of 8% with access to the money at any time. When the fund started to have problems and began talking about restructuring the policies, there was a run on the DROP funds as officers rushed to pull their money out before the new rules limiting withdrawals went into effect. I think there was over $600 million pulled out by members at that time, leaving a huge shortfall in available investment funds going forward. Mayor Mike Rawlins removed those existing Board members and the plan developed by the Mayor and the State has two rank and file members but the rest of the board was appointed and each appointee must have extensive experience in finance, investments, banking, asset and risk management. The City of Dallas and the State of Texas had to step in and inject money into the Police-Fire fund to keep it from being insolvent in the future. So actually, the City didn't make the deal or deals...the members themselves did thru the people they elected to represent their interests.
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Return to “Dallas Under-Funding Police to the Point Where Life-Threatening Calls Go Unanswered”
- Thu Dec 20, 2018 11:55 pm
- Forum: LEO Contacts & Bloopers
- Topic: Dallas Under-Funding Police to the Point Where Life-Threatening Calls Go Unanswered
- Replies: 33
- Views: 17969
Re: Dallas Under-Funding Police to the Point Where Life-Threatening Calls Go Unanswered
- Thu Dec 20, 2018 12:20 am
- Forum: LEO Contacts & Bloopers
- Topic: Dallas Under-Funding Police to the Point Where Life-Threatening Calls Go Unanswered
- Replies: 33
- Views: 17969
Re: Dallas Under-Funding Police to the Point Where Life-Threatening Calls Go Unanswered
There is the real problem-follow the money. The pension fund managers for DPD and DFD kept increasing benefits based on unrealistic long term returns on investment promised by real estate investment trusts and other high risk/high return strategies. The Pension fund Board bought into this scenario and kept offering more benefits and options for early withdrawals without penalties. Like all ponzi schemes, that only works as long as you have people continuing to pump more money in than is being taken out. When cracks started to show in the fund, more officers started pulling money out at a higher rate than projected. They had a helluva pension plan. I know several guys living here over 100 miles from Dallas that put in their 20 years and retired with a great package guaranteed to them and then went to work for the local departments, or ran for a constable orJP position and are picking up another pension pkg. with a salary that goes straight to the bank or into rental property to provide more passive income. One friend is still with the fire department with almost 30 years in and as a Commander is drawing a very nice salary while only working 10 days a month due to all the paid leave and vacation time, personal days off etc...that has accrued over the years. He has been working that way for the last 3-4 years and says he will continue to do that for another few years. He and his wife have been building a portfolio of rental properties funded by early withdrawals from the pension fund, and with all his time off he can take care of upkeep and any needed maintenance issues himself during the other 20 days a month that he is getting paid for. The younger officers see that happening more and more and their promised benfits packages being restructured and reduced to avoid the collapse of the pension fund just like it has happened in Houston and other large cities, and they start leaving and taking what they have out and going to outlying affluent suburbs with plenty of tax money coming in from fast growing high end real estate subdivisions with much less crime and problems.