In a recent government meeting, officials discussed the ongoing challenges facing the Dallas Police and Fire Pension System, highlighting significant funding issues and the implications of pending litigation. The meeting featured presentations from the Texas Pension Review Board (PRB) and representatives from the Dallas Police and Fire Pension System, who provided updates on the pension's financial status and legislative requirements.

Amy Cardona, executive director of the PRB, outlined the pension system's current funding challenges, noting a troubling demographic shift: there are now more retirees receiving benefits than active members contributing to the fund. This imbalance has resulted in a funded ratio of less than 40%, indicating that the system's assets are insufficient to cover its liabilities. The PRB's actuary, David Fee, emphasized that it would take 82 years to fully fund the pension at current contribution levels, a stark contrast to the 39-year funding period in 1994.

The discussions also focused on two key statutory funding requirements: one stemming from House Bill 3158, enacted in 2017 to address the pension crisis, and the other a general state requirement known as the Funding Soundness Restoration Plan (FSRP). The former mandates that the pension system adopt a funding plan by November 1, 2023, while the latter requires a joint plan with the city of Dallas by September 1, 2025. Both plans aim to achieve a 30-year funding target.

Tensions arose as representatives from the pension system and the city presented differing proposals for addressing the funding crisis. The pension board has proposed an actuarially determined contribution (ADC) plan with a three-year phase-in period, while the city has opted for a five-year phase-in. Additionally, the pension board is advocating for a cost-of-living adjustment (COLA) for retirees, which the city has not included in its plan. The absence of a COLA since 2016 has raised concerns about benefit erosion for retirees, particularly given that they do not receive Social Security benefits.

The meeting concluded with a recognition of the complexities involved in reaching a consensus on the funding plans. Both parties acknowledged the need for collaboration, but significant disagreements remain, particularly regarding the timing and structure of contributions. As the deadline for the funding plan approaches, the PRB will report to the legislature by December 1, 2023, potentially paving the way for further legislative action if local agreements cannot be reached.