Appeals court sides with Dallas Police and Fire Pension System in 2014 DROP case
A state appeals court on Tuesday ruled that the Dallas Police and Fire Pension System had the authority to change the interest rate on the Deferred Retirement Option Plan, known as DROP.
The 5th Court of Appeals decision affirmed a district court's ruling that DROP interest is not a constitutionally protected benefit.
The plan allowed police and firefighters to retire on paper and continue working while their pension checks were deferred into DROP accounts. For years, the pension system guaranteed at least 8 percent interest on the money and allowed retirees to remain in the plan. The high rate has proved unsustainable and has helped endanger the entire pension fund.
In 2014, police and firefighters voted to gradually lower the DROP interest rate; it is now at 6 percent. Larry Eddington, a former pension board trustee, and two other police officers filed the lawsuit, arguing they were entitled to the high interest rate.
Read more: http://www.dallasnews.com/news/dallas-city-hall/2016/12/13/appeals-court-sides-dallas-police-fire-pension-system-2014-drop-case