AUSTIN- House Pensions Committee Chairman Dan Flynn (R-Van) filed House Bill 3158 Tuesday to address the Pension Plan for the City of Dallas and Dallas Police and Fire. This bill will direct the plan to work out its issues locally with a new strong board of trustees. This board will be free of heavy representation of those from elected positions and those without significant business experience. Additionally, it will be composed of business executives with strong training required in fiduciary duty to save the plan, and will be informed of the dangers of alternative investments and general board functions such as rule making. With the growing number of pension plans in Texas that are not actuarially sound, this bill will ensure the Dallas plan is actuarially sound and represents a giant step forward for a plan often criticized as the poorest governed plan with the highest benefit payout.
"I am very concerned that without this piece of legislation, the Dallas Plan would have the potential to collapse in the very near future. We are continuing to refine the plan with all stakeholders to ensure the end result is the best possible outcome for the City of Dallas, the Pension Plan, the Retirees and the newest recruits to the fire and police force. I want to thank Sam Friar and Kelly Gottschalk at the plan, Mayor Rawlings and the many others who have contributed," Chairman Flynn stated.
Pension plans not actuarially sound, if left uncorrected, have the potential to cause a lot of damage across the state. If local and State of Texas bond ratings are potentially downgraded as a result of these pension plans, this would cost the State of Texas millions of dollars.
Chairman Flynn has additionally filed House Joint Resolution 85 which addresses the state's responsibility to bail out pension funds by stating that the state is not responsible and will not bail out those funds in the future. The 'fix' must be local. In conjunction with HJR 85, Chairman Flynn has also filed House Bill 2434 that addresses the 66 billion dollars the plans are short regarding pension fund obligations and requires actuarial soundness of the remaining pension plans that currently do not meet actuarial soundness standards.