Dallas Cops Retire In Droves; Take Lump Sum Pensions Fearing Money Isn't There (And It Isn't)

Tyler Durden's picture

Submitted by Michael Shedlock via MishTalk.com,

The Dallas police and firefighters pension fund has just 45% of the money it needs to cover benefits. The fund rates to be out of money in 15 years at the current rate of withdrawals.

For those eligible, the sane thing to do is retire and take a lump sum payout before the money is all gone.

That’s precisely what’s happening, and it is further pressuring the system.

dallas-pensions

Please consider Dallas Police See Exodus as Doubts Rise on Pension Promises.

Dallas’s police and firefighters are quitting in droves, wagering that financial-market losses are about to render their promised pensions too good to be true.

 

With the city considering benefit cuts to help close a retirement-fund shortfall that grew by $1.2 billion last year, more than 200 workers have decided to retire or leave, about double the normal rate, said Mayor Pro Tem Erik Wilson, who sits on the Dallas Police and Fire Pension System’s board.

 

“I’ve had 40 to 50 officers in my office this week asking what they should do,” said James Parnell, 52, secretary-treasurer of the Dallas Police Association and 25-year veteran. “They’re very nervous about what is going to happen, they’re fearing a run on the money.”

 

In the year through June, U.S. state and local-government plans posted the smallest gains since 2009, leaving them with almost $2 trillion less than they will eventually need, according to data from the Wilshire Trust Universe Comparison Service and the Federal Reserve.

 

The squeeze on Dallas’s fund is even more acute because of a decision to divert money from stocks and bonds into Hawaiian villas, Uruguayan timber and undeveloped land in Arizona, among other non-traditional investments. The strategy, put in place under prior managers, backfired. The fund lost 12.6 percent in 2015 and 0.7 percent over the past three years.

 

On Monday, dozens of city employees and retirees packed into a meeting where officials discussed options for dealing with a possible liquidity crisis brought on by the increase in retirements.

 

The public-safety system has just 45 percent of the assets it needs to cover benefits, down from 64 percent at the end of 2014 and half what it was a decade ago. The pension could be out of cash in 15 years at the current rate of projected expenditures, according to a Segal Consulting report in July.

 

Officials don’t know if making changes to the deferred compensation plan “will be enough to keep it solvent” because the “program isn’t sustainable,” said Dallas City Councilwoman Jennifer Staubach Gates, who also is a member of the pension board.

 

“We’re trying to address some really alarming numbers,” said Gates.

Bankruptcy Law

Unlike Illinois whose pensions are in even worse shape, Texas specifically allows chapter 9 filings according to the Governing.Com article Municipal Bankruptcy State Laws.

Sensible Actions

  1. The sensible solution is municipal bankruptcy coupled with big pension haircuts.
  2. Before the pension fund implodes, the sensible action for Dallas police and firefighters is to retire ASAP and take a lump sum payment.
  3. Point number two ensures that a run once started is likely to be fast and furious, which is where we are at today.

This is going to get interesting in a hurry.

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pods's picture

Hahhaha, protect and serve (as long as I am getting my fat pension).

pods

SHEEPFUKKER's picture

Protect and serve the 1% with the 99%'s $$....brilliant!!

RafterManFMJ's picture

Smart cops? Who'da thunk it?

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) RafterManFMJ Oct 17, 2016 2:57 PM

Time for the gubmint boot to come down hard on the necks of tax payers.  We have wealthy gubmint retirees (after 20 years of "work") to pay for.  Screw your retirement savings, menial tax payer.  You "owe" it to these "public servants."

Boris Alatovkrap's picture

Boris is similar approach to retirement from Copper Ore Mining Operation… pull it out of ground while there is still copper in ground.

0b1knob's picture

In Soviet Union, ore is in the ground.

In Soviet America, 'ore is running for president and will run country into the ground.

 

Jackoff Smirnoff

AK_47's picture
AK_47 (not verified) 0b1knob Oct 17, 2016 6:07 PM

My last pay check was $9500 working 12 hours a week online. My sisters friend has been averaging 15k for months now and she works about 20 hours a week. I can't believe how easy it was once I tried it out. This is what I do... http://tiny.cc/rfp2fy

glenlloyd's picture

Certainly this was unexpected. That is unless you've been reading this since the beginning...

Maybe these sheeple will finally realize that all the rainbows and butterflies are nothing but cardboard cutouts.

NoDebt's picture

"The squeeze on Dallas’s fund is even more acute because of a decision to divert money from stocks and bonds into Hawaiian villas, Uruguayan timber and undeveloped land in Arizona, among other non-traditional investments. The strategy, put in place under prior managers, backfired. The fund lost 12.6 percent in 2015 and 0.7 percent over the past three years."

Yeah, yeah, that's pretty much the dinner bell ringing right there.  Come get it before it's all gone.

I guess their pension fund investment manager didn't get the BTFD memo that's been circulating since 2009.

 

pods's picture

Wouldn't it be a hoot if Alpacas were mentioned?

pods

NoDebt's picture

It would be even funnier if tax increases were mentioned.  Becasue that would be the truth, which can never be told when a pension or "benefit" is involved.  Not "ha ha" funny, mind you.  More like "oh, shit" funny.

 

whatamaroon's picture

The Dallas 'taxpayers' are indeed on the hook for the $pension shortfall.

Freddie's picture

Ha ha!  F**king irony.

The shit Dallas PD were co-conspirators in the murder of JFK and the murder of sheep dipped patsy Lee Harvey Oswald.

JFK wanted to end The Fed.   Hilarious that Dallas PD is about to get f**ked by Fed ZIRP and fiat.   Let em eat cake.

//
sun tzu's picture

You really think some low level street beat cops were let in on the secret? LMAO!!!

onthesquare's picture

How do you feel being the tail end of a Ponzy scheme.

Retirement and Pensions; It is so last century.

AGuy's picture

Wait for it! 3..2..1.. And Dallas ends early retirements and lump sum widthdrawals for new/existing retirees! Problem solved for now. let the "next guy" fix it when the problem is even worse!

 

"I guess their pension fund investment manager"

Often Pension plan regulations limit what they can invest in. Usually AAA (ZIRP) bonds. Plus its likely that the Dallas never provided sufficient funds to begin with, and to top it off, loading up with allegedly AAA rated MBS during the housing bubble sealed the deal.

 

RaceToTheBottom's picture

"Run on the Investment Fund!!!!!"

Stan Smith's picture

    Had I known "Hawaiian Villas" were going to be the hot item as far as investments go,  I would have paid more attention to that timeshare walk through 20 years ago on my honeymoon.  

    Oh well.   I'll just have to invest in Uruguayan timber and undeveloped land in Arizona instead.

onthesquare's picture

Stan, Stan, Stan...The failure of retirement funds is universal.  It is like the black hole of investiment.  As long as there is growth then the ponzy scheme can appear to look perpetual.  Once growth stops then perpetual motion begins to slow then stop then reverse.  Get out before the reversal but that is not so easy if you are just starting your employment career and your life of servitude.

All things that are enjoyed by retirees may have been a hot investment at one time now they are dead.

Stay away from trailer parks, retirement living places, golf courses, living health care, security, and all other shit ties to what "when I retire then I will..." bullshit.

Their income is either not going to be there or severely reduced and in some cases may turn into a liability.

 

Bastiat's picture

. . . and that is what a loss of confidence looks like.

True Blue's picture

They just forgot to forward the memo to their sparkling new villa in Hawaii, with Uruguayan hardwood floors and big colorful pictures on the wall of their new golf course community subdevelopment in the Az desert.

Sheep get sheared; be the wolf.

ghostofelvis's picture

I admit, if I had just seen five of my coworkers shot and killed during some "protests" I'd cut and run as well. 

booboo's picture

It won't matter when a fixed montly amount won't buy them a box of donuts and can of jack boot polish, now lets talk about COLA increases that the government will fix at a negative rate and YOU GET NOTHING!! NOTHING!!!!

Ignatius's picture

To protect and serve thy pension.

CJgipper's picture

Outside of insane places like Chicago, cops make 30-40k/yr.  Yes, they're doing it for the pension.  And they're earning it in my opinion.

 

FYI, I'm a private practice professional, so I'm the one paying for all this.  I feel that cops are under comp'd without the pension, and appropriately comp'd with it.  Without the pension, they're going to have to be paid 60-80k cash, even in small towns.

Mtnrunnr's picture

I'd do it for 40k in a Montana town.

pods's picture

You couldn't pay me enough to enforce the asinine laws in this nation.  

I guess I don't get off on extracting money from the populace at gunpoint for the state?

pods

BolanosGhost's picture

Headline from the Future:

Robocop Makes His Big Debut

Amid concerns from the public that the large number of offiers leaving DPS would cause crime to increase, Dallas DPS announced today that it will be starting a robotic crime watch and law enforcement division. The Police Chief remarked that "Hey, it takes human lives out of danger, robots don't suffer fatigue, and beyond the initial investment, they work practically for free." Earlier this year, Dallas Police had some success with a trial version of the program whereby a bomb wielding robot put an end to a crazed shooter's rampage. Dave from Twitter said: "It was totally cool the way that guy was turned to pink mist. That guy got what he deserved". Other benefits of the program will include automated issuance of parking tickets and establishing a networked infrastructure for the monitoring public safety and identifying offenses.

 

RaceToTheBottom's picture

Next:  PreCrime.

"I knew that guy was going to commit a crime before I even saw him"...

WillyGroper's picture

have a friend that worked on the 1st robocop movie.

FarmerBoy's picture

https://www.youtube.com/watch?v=VTnxP7e7-YA

 

Robotic law enforcement.  From the director of "District 9"

onthesquare's picture

There is going to be more Civil Forteiting going on and the money will not make it to the station.

Licensed to steal.  

1980XLS's picture

In "The Hunt for Red October" he got shot and killed before he made it to Montana.

Lost in translation's picture

Hear, hear!  Public school teachers, too!  And DMV employees!

/SARC

aardvarkk's picture

That's about my take on the thing as well.  I only know 2-3 cops socially, but I know they don't get paid the numbers I see bandied about for cops in ChiTown or Cali or NY or wherever.  They work in small northern towns and get paid bupkis.  One cop died in my town last year when responding to a domestic disturbance (most regular cops will tell you those are often the most dangerous to respond to).  With what those cops get paid and what they're putting on the line, they NEED those pensions and deserve them.

We also have a rising black population locally, and there hasn't been any trouble that I've seen related to that.  I've even seen a local cop hanging out outside one of the gas stations having a coke with some of the black kids.  I hope the Chicago stuff doesn't come this way.  I like our curent social situation the way it is, thanks.

Freddie's picture

Obama, Soros, Paul Ryan, Bushes and Clintons will make sure Chicago and Tijuana will come your way.

The few cops I knew or women married to cops - were whore chasers who cheated on their wives.  One had all his cop buddies lite their asses off during her divorce trial.  I never tried to touch her because her hubby would have stuff on him from multiple prostitutes.

WillyGroper's picture

"lite their asses off"

is that a fart joke?

Offthebeach's picture

Mass, to N.J, try $80k, and up.

plus overtime ( sometimes tripple )

 

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) Offthebeach Oct 17, 2016 4:01 PM

Montgomery County, MD same.  Plus WAY too many retire with large disability increases on top.  Too much time sitting on their butts in the car, I guess.

TuPhat's picture

With overtime in Houston, 100K+.

Freddie's picture

I have been spending time in a predominantly white city.  The cops have nothing to do.

A lot of people will kill for a $30 or $40 K job.  Loads of college educated kids too.  Go back to watching your NCAA, NFL and NBA Trayvon thug ball games like loads of dumb white males do.

dot.dot's picture

They average 80,000+/Yr in decent suburbs here in Ohio.  That is WAY too much for the 'work' that they do (on top of Cadillac health plans/ Full Pension after 20 yrs).  They sit on their fat asses driving around harrassing people for stupid shit all day long.  IMO, life would be more pleasant if you fired 3/4 of them (low dindu population).

Jack's Raging Bile Duct's picture

Yeah, because riding around in a comfy cruiser all week in between occasional shakedowns and assaults on the local peasantry is such rough work. They deserve every fucking penny that they haven't already siezed.

sun tzu's picture

I say too fucking bad. All civil servants should be on a 401K plan like the rest of us. 

Mtnrunnr's picture

Would you want to serve a nation where the criminals are protected and you are crucified?

booboo's picture

They enforce the Laws, if they think they are unfair they can stop anytime, no one holds a gun to their head. In fact the dipshit Unions lobby for more absurd laws for them to enforce.

migra's picture

Cops are like anybody else. They take care of themselves. Protecting you is their job. Nothing more, nothing less. No pension, no protection for you. Just like any other job, when the money stops coming, they walk.