Released by the Office of State Rep Dan Flynn
AUSTIN- "We are on the verge of saving the plan which will have a statewide effect and set the example for pension reform," said Representative DanFlynn (R-Van) Chairman of the Texas House Pensions Committee. The Dallas Police and Fire Pension members are now left with the options of a collapse and take over by the City of Dallas, or reforming their plan to make progress in improving and refining the bill through the diligent efforts of many city and plan representatives. "Many groups are in our office daily working on various aspects of the legislation, coming up with new ideas and representing well the police and fire employees of Dallas. Government is run by those who show up and participate in good faith, not by those who sit back and complain. I am proud of the efforts of everyone involved," said Representative Flynn.
Improvements negotiated to the original bill include having the City of Dallas add more than $650 million dollars to the plan and making important changes to the selection of board members. It will also allow the same 7 police and fire associations that are a part of meet and confer in Dallas to choose a certain number of trustees on the professional board and allow the flexibility for the new board to adjust the retirement age and multipliers. The bill leaves issues of 'equity return or claw back' to the future professional board and not the City of Dallas, which would be the immediate option if not addressed in the bill. As Representative Flynn stated, "It is much better for the rank and file members of the Dallas Police and Fire Pension plan to let a future board addressing these situations then just turning it all over to the City of Dallas which is what will happen if the legislation does not pass."
The Dallas Police and Fire Pensions plan is considered to have the most enhanced benefits and worst governance in the country. While it may be uncomfortable for many to see their enhanced benefits reduced, it is a requirement to save the plan. Without this piece of legislation, HB 3158, the plan has the potential to collapse in the near future, sooner than the 10 years previously reported in the press.
The Bill provides actuarial soundness to the Dallas Police/Fire Plan while not raising taxes and having no new bonding. It raises the retirement age to only 58 - not the standard retirement age of 65 - and reduces the multiplier for pension calculations to 2.5%. This is better than the State's Employee Retirement System which rests at 2.3%, and far above that of Social Security, which is the retirement for many Americans. Additionally, the bill eliminates 'plan killers' or COLAs until the plan is profitable. While this legislation does not allow for wholesale lump sum distributions from DROP, it does allow DROP participants to receive their payouts over a lifetime so that the Plan can stay actuarially sound. Representative Flynn remains dedicated to protecting the current pensions for plan members, preserving the pension for the newest recruits and supporting Police and Fire members who work hard every day to keep us safe.