This Pension is on Fire

The Dallas Police & Fire Pension (DPFP) is on fire. The pension is responsible for covering the retirement needs of around 10,000 police and firefighters.

smoke

The plan is in chaos and is on the verge of collapse. The plan’s board and the City of Dallas are in talks about benefit cuts and/or tax increases to save the plan from failure. DFPF even lost its first chief investment officer James A. Perry who exited on July 22, 2016 to take on a job at Maples Fund Services. Perry was hired in August 2015 to try to turn the ship around. In an August 11, 2016 article in the Dallas Morning News, Jim Aulbaugh, a battalion chief for Dallas Fire-Rescue stated in an interview that the pension was, “a sinking ship that can’t be saved.”

In response to the potential insolvency, police officers in Dallas are retiring even faster, some choosing for full cash withdrawals versus monthly distributions.

What Happened?

After the dot-com bust, many pensions like DPFP, even giants like the California Public Employees’ Retirement System (CalPERS), went head-over-heels for real estate. It wasn’t just investing in core office buildings in city centers, pensions were speculatively investing in land, apartments, and other forms of opportunistic real estate. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]


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