Texas House Of Representatives Files Bill They Hope Will Save The Dallas Police Pension From Insolvency

Tyler Durden's picture

After months of lawsuits, tense rhetoric and hundreds of millions of dollars rushing out the door of the failing Dallas Police and Fire Pension System (DPFP), House Pensions Committee Chairman Dan Flynn, a Republican, filed a bill Tuesday afternoon that he hopes will prevent the system from going insolvent in the next decade.  The full 177-page bill can be read here, but, for those who would like to avoid death by boredom today, the key components of the legislation are as follows (per the Dallas News):

  • Raise the full retirement age for Dallas police officers and firefighters to 58 from 55.
  • Increase employee contributions to 13.5% of payroll from 8.5%.
  • Increase Dallas taxpayers contributions to 34.5% from 27% in 2015.
  • Eliminate guaranteed cost-of-living increases.
  • Eliminate interest rates on the deferred retirement option plan, known as DROP. (DROP allowed veteran officers and firefighters to retire on paper while their pension checks accrued in what were effectively high-interest savings accounts.)
  • Limit future participation in DROP to 10 years.
  • Lay the groundwork for a future board to reclaim the unsustainably high interest payments that have already credited or been paid out through DROP — a move that would almost certainly prompt a legal challenge.
  • Pay out the existing $1 billion in DROP accounts to retirees in annuities over their projected life span, except in case of emergencies. (More than $500 million in lump-sum DROP withdrawals had previously accelerated the system's projected insolvency date.)
  • Significantly overhaul the makeup of the police and fire pension board of trustees to include more credentialed professionals and only two active or retired police and firefighters.

Of course, no amount of incremental taxpayer funding will ever be sufficient to stop angry pensioners from playing the victim card when the realities of their pension ponzi schemes are exposed for all to see.

 

And we kind of see Frazier's point, except for the fact that the increase in the taxpayers' contribution rate to 34.5% will result in an incremental $22 million in costs for Dallas residents each year...so actually, in hindsight, we're not sure we understand his point at all.

Dallas Mayor Mike Rawlings also expressed frustration that Flynn's bill left his city wide open to police and fire back-pay lawsuits which would also fall on taxpayers to fund.

"It's complicated," Rawlings said. "There's a lot of stuff there. That's why there has got to be a lot of work sitting down with pencils and working out the details."

 

City officials didn't get one major provision they wanted: The bill currently doesn't include language to exempt the city from liability in multibillion-dollar police-and-fire back-pay lawsuits. Rawlings said it's "critical that we get that resolved this legislative session."

 

But the most important part of the bill, Rawlings said, is governance. He's not quite comfortable with the board of trustees yet, but wants to make sure taxpayers "don't get whipsawed into this situation again."

Meanwhile, more conservative voices pointed out, as have we on numerous occasions, that the DPFP is just the latest example of the "failure of the defined benefit model." 

James Quintero, the director of the center for local governance at the conservative Texas Public Policy Foundation, said the Dallas pension system is an example of "the failure of the defined benefit model."

 

"There is a lot behind that statement, but it can be boiled down to the simple premise that these plans have been over-promised and underfunded for a long, long time," Quintero said. "And what you're seeing is the chicken come home to roost."

 

Quintero said a defined-contribution plan might be a tough sell this legislative session, especially with city leaders and pension officials both supporting the defined-benefit model. And pension officials say the hole they are in is so deep that switching to a defined-contribution plan could be more expensive than saving the pension system.

Of course, as we've already noted, the $7 billion shortfall in the DPFP triggered downgrades to Dallas’s credit rating from Moody’s and S&P in recent months which has wreaked havoc on the city's bond yields. (chart per Bloomberg).

Dallas

 

But don't worry dear pensioners, there is no problem too large for taxpayers to bail out.

A summary of the plan adopted by the DPFP board can be viewed below:

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VWAndy's picture

 50 foot of good rope should fix it. jus sayin

Croesus's picture

Yeah, good luck with that, Pols..when will you idiots realize:

You can't legislate away the laws of MATH?

Save_America1st's picture

after this, how do you think every pension fund manager in the world is liking life right about now, ay???  lol

The sheeple that are paying attention to this and relying on their own pensions are all now wondering very nervously about whether or not their shit is safe and sound. 

Because if Dallas is all fucked up and insolvent then you can pretty much damn well bet that 95% of all others are fucked up and insolvent too.

He who panics and withdraws funds first, panics and survives best...

...bitchez

TeethVillage88s's picture

MSM - Crickets.

MSM & Congress: Nothing to see here.

Central Bank, Treasury, OCC, FDIC, FINRA, SEC, FBI, FTC, DOJ: Nothing to see here.

Office of the Comptroller of the Currency, John C. Dugan, John D. Hawke
Treasury Secretary, Jack Lew, Timothy Geithner, Henry Paulson, John Snow, Larry Summers, Robert Rubin
FDIC Chairman, Martin J. Gruenberg, Sheila Bair, Donald E. Powell, Donna Tanoue
SEC Director, Mary Jo White, Elisse Walter, Mary Schapiro, Christopher Cox, William Donaldson, Harvey Pitt, Arthur Levitt
FINRA Directors, Mary Schapiro,
DOJ Director, Eric Holder
FBI Director, Robert Swan Mueller III, James B. Comey
President of the US, Barack Obama
Obama National Security Advisor

2017 Committee Members

Janet L. Yellen, Board of Governors, Chair
William C. Dudley, New York, Vice Chairman
Lael Brainard, Board of Governors
Charles L. Evans, Chicago
Stanley Fischer, Board of Governors
Patrick Harker, Philadelphia
Robert S. Kaplan, Dallas
Neel Kashkari, Minneapolis
Jerome H. Powell, Board of Governors
Daniel K. Tarullo, Board of Governors

glenlloyd's picture

Like many muni's it's a golden goose for FD, PD etc. The people at the table during the original negotiations for these matters didn't have any skin in the game so they didn't really care about how badly the public was being bent over. Now the whole thing blows up and the golden goose is getting strangled and the PD, FD etc are all pissed off.

In my town pension pay is based on the last year or so of a PD officers compensation so what they do to get a much better pension payment is jack up the work hours with OT and lots of extra shifts and glide through a year of that until they can walk away at the end of their tour with a big six digit income. That's how they screw the tax payer here. Who ever heard of a pension that was more than you ever made when you were working?

Fuck the tax payer some more, why not.

Déjà view's picture
A recent report identified Dallas and Houston as having among the highest pension shortfalls among local governments in the country.

»Chicago had the most dire ratio on the national list. »Dallas came in second. According to the report, the North Texas city has unfunded pension liabilities totaling $7.6 billion. That’s more than five times the size of the city’s 2015 operating revenues.

»Houston, which came in fourth, faces a $10 billion shortfall, according to the report. That amount is more than four times that city’s annual operating revenues.

Both those cities may turn to the public to partially shore up their shortfalls. Houston Mayor Sylvester Turner wants to use $1 billion in bonds to infuse that city's funds. Dallas police officer and firefighter pension officials also want $1 billion from City Hall, an amount officials there say is too high.

https://www.texastribune.org/2016/12/02/billions-pension-shortfalls-thre...

                                                             ***

West Virginia paid the most generous benefits, equal to 115% of final earnings, followed by New Mexico (113%), Oregon (105%), California (102%) and, yes, conservative »Texas (101%)«. 

https://www.aei.org/publication/which-states-pay-the-most-generous-publi

                                                            ***

Debt is also growing rapidly among the state’s 81 retirement systems for local-government workers. Not only are these systems poorly funded; »it isn’t even clear how much some owe, since they haven’t disclosed the financial information necessary to verify their financial position, even to state oversight officials«. After an extensive survey of municipal pension systems, Combs determined that none of the local plans was fully funded and that only 19 percent had 80 percent of the funds on hand to meet future obligations. The Houston Municipal Employees Pension System is only 61 percent funded, for example; Austin’s pension plan for city employees is just 66 percent funded.

http://www.city-journal.org/html/deep-debt-texas-13556.html

TeethVillage88s's picture

Every Zerohedge member should look at this.

A) Fire Department Managers control working hours, overtime
B) Cities, Counties, Perishes, Townships, States control working hours, civilian personnel regulations, Emergency personal hours, bonuses, pensions, Schemes to increase working hours, last 3 working years earnings, and all attempts at rip-off.

WTF?

Do you think that the High Compensation fo Auto Machine Shop workers is by chance? Is the High Compensation and Pensions fo Chicago Workers by chance? When should we have known about this if off shoring started in the 1960s... and Employment fell off in 1979?

This is Propaganda.

The Nation Died in 1979, was finished by CIA entry to White House in 1981.

WTF?

Fuck this nation. We are too stupid to blog, or to comment on News Stories!!

This is the END!! The USA has ENDED!! The world can not buy USD with this kinds of Idiocy. Sell USDs at this point. Sell US Treasuries today.

WTF?

VWAndy's picture

  Are you suggesting its a bad idea?

BandGap's picture

Who votes on this or does it get rubberstamped?

Microcosm for America.

CheapBastard's picture
Outcry over firefighters making up to $400,000

SAN RAMON, Calif. -- Despite ever-tightening budgets, hefty paydays are actually becoming the norm for a lot of firefighters.

In 2015, some firefighters with the San Ramon Valley Fire District were making as much as $400,000 a year in total compensation, CBS San Francisco reports. More than half of the full-time employees at the department make more than $300,000 in total compensation a year, according to data collected by the watchdog group Transparent California.

 

http://www.cbsnews.com/news/san-ramon-california-firefighters-making-up-...

Outrageous abuses and corruption rampant. Don't expect any tears from me. I fund my own pension.

directaction's picture

How about cut the pension to zero?
Then let cops and other public workers save money for retirement like everyone else.
Damn parasitic bloodsuckers.  

gregga777's picture

Would it not be far easier and more equitable to claw back the $11,000,000,000,000 ($11 Trillion) stolen by the banking gangsters and CON Street Swindlers in the Great Financial Crisis AND the $8,000,000,000,000 ($8 Trillion) stolen by the Goldman Sachs Feral Reserve System for The banking gangsters using their ZIRP saver fleecing policy?

dot.dot's picture

Little sympathy here for those over-paid, under-worked 'hero's.

gregga777's picture

The Goldman Sachs Feral Reserve System has Bankrupted ALL pension plans through their policies that reward the criminal banking gangsters and CON Street Swindlers. They've enriched their Khazarian Mafia brethren beyond imagining.

MaxThrust's picture

"The Dallas pension system is an example of the failure of the defined benefit model"

 

No its not. The pension was underfunded, that's the failure.

roddy6667's picture

The defined benefit model needs a stable place to invest its funds. In a boom-or-bust stock market or a zero interest rate economy, it won't work. Why is it the responsibility of an employer to have the psychic powers to predict the stock market and make up the difference when it fails?

I find it amusing to see all these pensions circling the bowl. I know an ex-Teamster, and that's just hilarious. I worked ten years and only get $240 a month in pension. However, I lived beneath my means and saved enough money to not need it.

Pass the popcorn.

bugs_'s picture

22 million a year?  highway robbery without the highway.

Boris Badenov's picture

Here's the PROBLEM, Jerky.

If one asshole, er, well dressed man, gets away with this, its called PRECEDENT.

So they are trying REALLY HARD. Its disgusting.

venturen's picture

let it go belly up! They wanted too much...let them sort it out! Heck they can get pensions like the rest of us!

chosen's picture

Halting COLA can be a big deal if inflation heats up.  But they left out the most important point:  lower existing pension pay-outs.  

Blankone's picture

I find it confusing that a state commission (House Pensions Committee) has control over the Dallas pension plan and is able to decide what Dallas taxpayers have to pay. So, was it this state committee that approved the Drop Accounts and the stupidly high guaranteed interest rate (outright fraud) and failed to monitor the pension fund's obligations?

And 27% contribution by the govt is very high and the proposed 34.5% is crazy unless the cops match it.  I assume the rates are because the pension was allowed to become underfunded and have not been the historic rates.   Sorry but the cops should have been paying more into the pension than the taxpayers all along.

MisterMousePotato's picture

It's 34.5% from the 'employer', er, 'government', er, poor unrepresented tax donkey schmucks plus 13.5% 'from the cops'. (Yeah. Right. Where do they get that money? Oh, yeah. Their 'employer', er, 'government', er, poor unrepresented tax donkey schmucks.) A total of FORTY ... EIGHT ... FUCKING ... PERCENT of (already obscenely high) payroll.

Are you kidding me?

Bow down to your rulers, peasants!

Ben A Drill's picture

I think we Americans shot off our own foot. Here is why.

Buying Chinese crap or any third world country that doesn't pay a fair and living wage to their employees.
Letting illegals work in our country.
Allowing public unions to exist in the first place.
Allowing people to buy homes that have less then 20% skin in the game (20% of their own money).
Car loans more than 4 years.
Bankruptcy should only happen as a last resort. Should only be allowed once in a lifetime. 10 years of distroyed credit at least.
By getting into wars that don't have a exit plan.
Not taking care of our Veterans.
Not fixing our infrastructure.

Please feel free to add to the list.

ToSoft4Truth's picture

Ronald Reagan convincing us ketchup is a fruit. 

Doom Porn Star's picture

Maybe YOU were convinced; but, the rest of us knew steaming bullshit when it was dumped in fat coils in front of us.

peippe's picture

list is compelling, 

but about that 'one bankruptcy per lifetime' policy......

that could lead to some interesting marriage pairings, down the line.

'marrying for the freebie debt release' would become quite a fad.

Ben A Drill's picture

I know too many people that have a habit of deliberately going BK every 10-12 years. Marriage won't change a thing. One BK and your done. We have become to soft with people taking advantage of the system.

squid's picture

Most of what you say I agree with but this one here.....

"Not taking care of our Veterans."

 

There shouldn't be any left from my calculations. The last time congress declared war was December 8, 1941. That is 76 years ago. Most of them fellas are gone already.

 

Any deployment of US forces since then has been illegal.

 

Just sayin.

 

Squid

garcam123's picture

The people who created this con on people deserve to be made destitute and be publicy hung toshow the Rule of Law is in effect.  Until we start killing thewsae criminals in broad daylight, this shit is just going to continue.  I think the cops should be unarmed and taught politeness and courtesy.  Right now ther are the highwaymen of the 21st century  In my view they are the gestapo and as such, deserve death if they show a weapon.....they are still pigs to me as long as they carry a weapon.  They deserve shit or bubblegum..........what's that? They just raN OUT OF BUBBLEGUM!  gUESS WHAT POLICE UNION?

mOTHERFUCKERS!

ToSoft4Truth's picture

 Sheriff Andy Taylor on ~ Why he doesn't wear a gun

 

https://www.youtube.com/watch?v=4Fer9ql7itc

g'kar's picture

"Increase Dallas taxpayers contributions to 34.5% from 27% in 2015"

Dallas taxpayer "contributions"? WTF?

I have an alternate solution:

1) Put all new hires on an IRA based retirement system and let them fund their own retirement and match the 1st 7% of their contributions

2) Put all Dallas city and county employees on Obamacare on their own dime

3) Take all the money earmarked to pay for refugee and illegal alien free shit and use that to meet the obligations of the existing pensions

syzygysus's picture

Rascist!

Couldn.t resist

G-R-U-N-T's picture

sorry, but no matter what they do, they're finished, just like the many other States and municipality pension funds.

Keep in mind when they go bust, there will be zilch to pay out, and public employees will be shit out of luck! No more blue pill, only red, that will take you out of the ponzi with a slap in the face to reality!

https://ixquick-proxy.com/do/spg/show_picture.pl?l=english&rais=1&oiu=ht...

Sledge-hammer's picture
Sledge-hammer (not verified) Mar 8, 2017 8:44 PM

The pension is a nice idea in theory and is pretty effective in homogenous Caucasian countries, but in the Jew Matrix that is the USA, it is a failure.  They need to sh*t or get off of the pot.  Eliminate the pension, pay people up front, and let them figure out their own retirement.  The pension--another nice Caucasian innovation ruined by the jews.

10mm's picture

Lol. News for ya. A 58 yr old has know business in law enforcement.  It's a young person's game.

Colonel Klink's picture

Fuck'em! I don't get a pension. Eliminate ALL government employee pensions. PERIOD!

Barney08's picture

2 things certain in life NOT 3. Go screw your pension.

Fascal rascal's picture
Fascal rascal (not verified) Mar 8, 2017 8:56 PM

I don't know if it was R's or D's that promised these folks the moon for retirement.

But because R's are trying to fix it, they own it.

R's are now bad guys..

Those suffering should go after the ones that fucked them, and fuck them back!

hotrod's picture

Most tax payers DO NOT HAVE A DEFINED BENEFIT RETIREMENT.  Why are they on the hook?

My sister has been teaching at a Montessori school for over 30 Years.  She is 59 and recieves NO RETIREMENT.  They used to chip in for her 401k but stopped that years ago.  So her retirement is Social Security and the 401k she has contributed to and her RETIREMENT AGE IS 66.  Are these people any more special that my sister who has instructed thousands of children over her life time.????????

Even worse she will be a tax payer on the hook to pay these guys better benefits than she ever got.  WTH

chosen's picture

Yes, they are more special.  They can blow your head off in half a second and get away with it.

Kprime's picture

Well they don't get completly away with it,  they get

2 months off for good behavior

6 months vacation for pysch eval and recovery

promotions

pay increases

extra increases to their 6 figure pensions

10 years earlier retire for pysch pain and suffering

One hell of a good laugh down at the bar while the murders in blue celebrate your funeral

nah, they don't get off Scott free, it takes a lot of work to take home all the extra bennies.

Frankly I'm surprised the don't shoot more women, children, dogs, and old unarmed citizens considering the benefits that come with it.

bankbob's picture

It's not the COPs fault.  It's the City Managers who made promises that they cannot (or will not) keep.

bobdog54's picture

They are fucking up...

Never used that forbidden word on this site before but it's appropriate. Bailouts have to end, no exception. The Fed is a nothing more or less than a bailout. The payment for corruption, ineptness and greed must be paid, not bailed out.

Ye shall reap what thou has sowed. Nothing more and nothing less.

This is the ultimate rule of law and following it exactly will bring all societies into balance.

DrDre's picture

Texas is a predominantly Republican state, should they just let the market run its course? I though they were against regulations and government intervention ... things are always easier when they are not your own ...

Kprime's picture

meanwhile the feds are screwing non gov workers who put in 40 years by pushing SS back each year.  While they retire in their 40s and 50s we are pushed further towards our 70s.

.gov on all levels really are thieving muther fuckers and murders to boot.  I won't live to see the end or even participate but, I hope the 4th turning brings a lot of .gov blood in the streets. They have certainly earned it.

bankbob's picture

Here is a suggestion for SSN.  What if the Government only pays you the amount that you put in?  Would that make you happy?

Kprime's picture

they will never pay me back the amount I put in.  And why should they hold my money interest free for 40 years??

squid's picture

I have an idea....its radical but, hear me out.

The firemen and cops could retire say at....65?

And they could pay for their own pensions?

 

Radical I assure you but these are difficult times.

 

Thoughts?

 

Squid