Present and past employees of Fort Worth aren’t about to let city officials go back on their pension promises. The employees are fully prepared to join the officials on deck and go down with the ship together.
Fort Worth says its $1.65 billion retirement fund is already sinking, but employees’ groups would rather go to court than accept anything less than the 6,144 fund members and 3,517 beneficiaries are getting now, the Fort Worth Star-Telegram is reporting today.
And as Texas Watchdog has reported in some detail, expect to read this story again and again across the country as underfunded pensions drag local and state governments to insolvency.
While the actuarial details can get quite complicated, the problem in Fort Worth and elsewhere is really very simple. Not enough coming in to offset what is going out.
Fort Worth offered a pension program based on a projected annual rate of return for the fund of 8.25 percent. Since 2008, when the economy plummeted, the return hasn’t been in the same galaxy, 1.34 percent in the last fiscal year, the Star-Telegram reports. Net assets were down $5.7 million.
The city is offering modest changes it says will not change the basic structure of the pension plan. Employees would no longer be able to pile up overtime that becomes part of the benefit calculations. The proposal would reduce what a spouse continues to receive when a pensioner dies.
With the reforms, if all else goes well, Fort Worth ought to be able to close its unfunded pension liability in anywhere between 33 and 84 years, the city says.
Nothing doing, a deal’s a deal, Vince Chasteen, president of the city employees association, told the Star-Telegram. "To me, this is kind of like reneging on a contract. The city promised us a certain benefit, and now we get X-number of years down the road, and they say, 'We messed up.'"
Not to worry. Those promises made by the city are backed by Fort Worth’s hard-working taxpayers. On second thought, you might want to consider establishing a modest fund for a Viking funeral.
Contact Mark Lisheron at 512-299-2318 or email@example.com or on Twitter at @marktxwatchdog.
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Illustration by flickr user 401K, used via a Creative Commons license.