Not Just Dallas: Fort Worth Employees’ Pension Plan in Deep Trouble
|Dallas isn’t the only city in Texas with a sick retirement fund. Nearby Fort Worth is also in deep trouble.
Let’s dive into the Comprehensive Annual Financial Report for the Fort Worth Employees’ Retirement Fund for fiscal years ended September 30, 2015 & 2014 to see what we can find.
Fort Worth Retirement Fund
The Fort Worth “City” Pension plan has a liability of $1.271 Billion on assets of only $2.094 billion. The plan is 62% funded and covers 389,528 employees.
The “Staff” plan which covers the people running the pension plan is in better shape. But there is only 1,542 people covered.
For the fiscal year ending September 30, the numbers got much worse.
City Plan Has More Net Liabilities than Assets
The pension liability for the “City” plan for fiscal year ending September 2015 jumped to $2.124 billion. The plan has more net liabilities than assets.
Staff Plan in Much Better Shape
Congratulations to the staff running running the retirement plan. They are in much better shape.
Plan Assumptions
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The plan assumes 8% returns plus an extra 2% COLA in some cases.
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Projected salary increases are a “modest” 3.5% to 18.0%.
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The plan uses 5-year smoothed averages. That means the great recession was already factored out.
What is In the Plan?
The above image is not all the assets, I just clipped an interesting page.
More documents are available for download at the Fort Worth Report Center.
The person who emailed the above link wishes to remain anonymous, and offers this comment:
“Missing from the report are all the vacation hours the employees have stashed away. Some of the grandfathered ones have over 1,000 hours that will pad their benefits at retirement.”
It’s safe to say this pension fund will never make it, for numerous reasons. Benefit haircuts are coming.
For some reason, Fort Wort escaped the scrutiny of Dallas. I suspect that will change soon.
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