Fort Worth firefighters and police representatives piled into town hall this week to discuss the fate of the city of Fort Worth’s underfunded pension plan. The city stated that in order to keep up with payments it needed to raise an addition $50 million dollars in order to prevent the pension from going bankrupt in the future. Any deviation from current pension payouts to retired Fort Worth city employees could affect as many as 10,000 retirees.
Fort Worth Pension Task Force
Proposals from the City’s pension task force have proposed potential fixes for the bankruptcy threatened pension fund, which would include raising the retirement age for firefighters and police officers in the city, as well as reducing or eliminating increases in pension payouts due to cost of living adjustments. The proposed cost of living adjustment changes is not sitting well with city workers, who, for the most part, don’t seem to mind increases in money paid into their pension funds, but don’t want to lose valuable benefits.
Taxes and Credit Ratings
Still, others working to address Fort Worth’s growing pension problem believe that an increase in taxes could be the right fix. Whether there is a rise in taxes or not, taxpayer money will certainly be contributed to the system, an amount which is highly likely to increase. Fort Worth’s bond rating was downgraded this year as a result of the pension issues which could exacerbate the problem by making the cost of borrowing more expensive for the city.
What’s happening in Fort Worth, with the threat of a bankruptcy pension, is happening in Dallas, and nearly every other state in America with huge pension shortfalls. For Fort Worth, taxpayers and public workers are all awaiting city officials to announce a plan to fix the pension shortfall issue and should expect to see final recommendations in August of 2018.
For more information contact our Dallas and Fort Worth bankruptcy office to speak to an attorney.