Pension Board Votes on Big Changes for Retired Dallas Police and Firefighters - NBC 5 Dallas-Fort Worth

Pension Board Votes on Big Changes for Retired Dallas Police and Firefighters

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    The new members of the Dallas Police and Fire Pension System board voted on big changes to how some of the money retirees depend on is paid out. (Published Wednesday, Nov. 1, 2017)

    The new members of the Dallas Police and Fire Pension System board voted on big changes to how some of the money retirees depend on is paid out.

    Last year, there was a run on the bank after the pension system reported it was running out of money. The legislature stepped in make changes, including raising the retirement age and requiring officers pay more into the pension fund.

    A new board is also now voting on new rules for retirees, which was met by emotional testimony in Dallas on Wednesday.

    The discussion at Wednesday's pension board meeting centered on the Deferred Retirement Option Plan, or what's known as DROP. Retirees who paid into DROP accounts used to have full access to the money and could withdraw lump sums. That changed after DROP withdrawals threatened to bankrupt the pension system last year.

    Eventually, withdrawals were capped at $3,000 a month.

    The 11-person pension board voted Wednesday to adopt a new policy for DROP. Retirees with money in DROP would now receive monthly or yearly annuity payments, with the amount depending on their estimated life expectancy and how much money in their accounts.

    The life expectancy formula used in order to make the determination for a retiree was a point of contention at Wednesday's meeting when retirees argued the life expectancy calculated by the pension system was higher than what it should be for first responders.

    Retirees also argued against a proposed fixed-interest rate of less than three percent, much lower than previous rates, which were between eight and 10 percent.

    Retirees told the board it felt like their money was stolen, many saying they kept their jobs with the city of Dallas based on the promise of being able to retire more comfortably.

    The pension system says DROP money is needed to keep the fund afloat, and a new law requires the board make changes that would return the pension system to full solvency.

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