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Federal Judge Throws Out DROP Lawsuit Against Dallas Police And Fire Pension System

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Michael Zanussi
/
Flickr Creative Commons

A federal judge has dismissed a lawsuit against the Dallas Police and Fire Pension System over the Deferred Retirement Option Plan.

The plan allowed Dallas police officers and firefighters to retire on paper and continue receiving pension checks that went to an individual account. There were few withdrawal restrictions, and the accounts grew at interest rates of at least 8 percent for years.

Six retired Dallas police officers filed the suit last January. They argued the board's decision to freeze lump-sum withdrawals from their Deferred Retirement Option Plan — or DROP — was unconstitutional.

But a federal judge disagreed. David Godbey called the board's decision legitimate because the pension fund would have become insolvent within the next decade if the Texas Legislature and the board did not act.

The judge's dismissal was with with prejudice, meaning the plaintiffs cannot refile the case. But the officers' attorney vowed to appeal the judge's ruling.