Dallas authorities and the Dallas Police and Fire Pension System are tackling a significant $3 billion pension deficit, with recent legal correspondence highlighting a dispute over who holds the final authority to approve the funding plan.
A letter from Ben Mesches, representing the pension system, asserted that the system's board has exclusive authority to adopt a pension plan and does not require the city's approval. However, City Attorney Tammy Palomino countered this, stating that state law mandates the pension system and the city to jointly formulate a plan, with the Dallas City Council playing a crucial role in the approval process.
Council member Tennell Atkins expressed surprise at learning about the letter and emphasized the importance of policymakers being involved in the decision-making process. He noted that taxpayers, ultimately responsible for funding the plan, should have a say in its approval.
Kelly Gottschalk, executive director of the pension system, emphasized the board's stance on having the final say. She mentioned a legislative provision enacted in 2017, giving the Dallas mayor authority to appoint a majority of pension board members. Gottschalk highlighted the city's historical underfunding of the pension system compared to other services.
Despite the differing views, both sides aim to reach a mutually agreeable solution. They agree on the goal of fully funding the system within 30 years, following recommendations from the actuarial firm Cheiron. However, they differ on the timeline for reaching the recommended contribution levels, with the city favoring a more gradual approach.
As the city works to address the pension gap, officials are exploring various options, including potential adjustments to employee retirement contributions and the city's sales tax allocation to the Dallas Area Rapid Transit. The city aims to present its budget plan in August and must finalize a 30-year funding plan by November 1 to address the pension shortfall.