I was surprised to not find an existing thread on this forum regarding the Fort Worth city employee pension fund problems. Apparently that account is leaking money, primarily due to a heavy reliance on investment income to cover a portion of future obligations. Well, we all know how investment income looks these days, and perhaps well into the future... Mayor Price sees the situation as critical:
Moody's has downgraded Fort Worth municipal bonds, but that sort of action has lost many teeth, again due low interest rates and the resultant low cost of borrowing, but the city and the fund management has an obligation to citizens and more importantly to city retirees to manage the fund in a responsible manner so that it is solvent into the future. Were benefits promised under the pension program too generous? Should the employee contribution have been higher? Should the trustees have seen the writing on the wall and moved to change the makeup of the fund's investments many years ago? What is the cost of managing this fund as a percentage of its value? Many questions are being asked and there are several options possible to address the issue, but the city needs to correct the path the fund is taking while maintaining it's promise to employees covered by the fund and considering the costs to taxpayers.