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Not Just Dallas; Fort Worth Employees' Pension Plan In Deep Trouble

Published: December 13, 2016
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Source: Michael Shedlock

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

 

fort-worth-retirement-plan1

 

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

 

fort-worth-retirement-plan2

 

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

 

fort-worth-retirement-plan2

 

Congratulations to the staff running running the retirement plan. They are in much better shape.

Plan Assumptions

 

fort-worth-retirement-plan6

 

  • The plan assumes 8% returns plus an extra 2% COLA in some cases.
  • Projected salary increases are a “modest” 3.5% to 18.0%.
  • The plan uses 5-year smoothed averages. That means the great recession was already factored out.

What is In the Plan?

 

fort-worth-retirement-plan5

 

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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