Risky investments from seven years ago appear to still be hurting the Dallas Police and Fire Pension System. While a deadline to submit a plan to fix the billions in unfunded liabilities looming, a city contractor says its time to make better investment decisions.
Dory Wiley is the president and CEO of Commerce Street Investment Management and worked on an initial analysis of the Dallas Police and Fire Pension System鈥檚 investments. Wiley told the city鈥檚 Ad Hoc Committee on Pensions that the fund was performing below average, compared to other systems in Texas.
Wiley presented a chart with 33 Texas retirement funds, including Dallas鈥� sworn and non-sworn systems included. Dallas鈥� public safety fund ranked last in 10-year net returns across the state.
鈥淭he bottom two are Dallas police and fire,鈥� Wiley told the committee during Thursday鈥檚 meeting. 鈥淥ne with the private assets and one [without] the private assets.鈥�
Wiley said the public safety fund has done a good job with investments in public equity 鈥攐r stocks. As of June 2023, the fund has received over 8% in returns. That鈥檚 more than other peer cities, according to Wiley鈥檚 presentation.
鈥淏ut having said that, we go to the private equity and then that鈥檚 where the underperformance is,鈥� Wiley said. 鈥淧art of that is legacy assets鈥hey鈥檝e been dealing with them for the last seven years, I know they鈥檙e still dealing with them.鈥�
Those legacy assets include real estate investments that landed the pension fund in the situation it鈥檚 in now. Last year, those assets returned just over 4% compared to 17% in Houston and other similar-sized funds in Texas.
Basically, Wiley told the committee it was more about where the funds assets were allocated that dictated the returns. If weighed correctly, Wiley says the fund could be getting way more in returns.
鈥淲e have to spend a lot of time on asset allocation because that鈥檚 the key,鈥� Wiley said.
During the meeting, District 12 Council Member Cara Mendelsohn questioned Wiley鈥檚 firm 鈥� and his knowledge about how the police and fire pension system works.
"You are questioning some of these investments...are you finding under their current structure that you feel that they may not be receiving appropriate investment advice?" Mendelsohn asked.
鈥淎ll I can tell you is my cursory analysis that we鈥檝e done,鈥� Wiley said. 鈥淭hey may be doing everything perfectly but from my initial analysis, it doesn鈥檛 appear so.鈥�
Mendelsohn also asked about the firms current work. Wiley said Commerce Street Investment Management does not manage or consult for other government pension systems right now 鈥� but he has personally served on large fund boards in the past.
鈥淚 don鈥檛 mean this to be a combative question, but do you think you鈥檙e qualified to make the decision to advise us?鈥� Mendelsohn asked during the meeting.
鈥淭hat鈥檚 up to you,鈥� Wiley responded. 鈥淚鈥檝e been doing this a long time, I鈥檝e got an undergrad [degree] in accounting and finance鈥 master鈥檚 from [Southern Methodist University], I鈥檓 a CPA, I鈥檓 a CFA.鈥�
鈥淟ast I checked I鈥檓 the most licensed person in the industry in Texas, but I could be wrong, someone may have taken another test and gotten me,鈥� Wiley added.
Wiley said there is a lot of work to be done on the city鈥檚 pension, that it was a thankless job and that he wouldn鈥檛 do it if it wasn鈥檛 Dallas.
鈥淚鈥檒l be honest with you, its sort of like seeing a hurt dog in the road and I know if I go help it I know I鈥檓 going to get bit, and that鈥檚 okay,鈥� Wiley said. 鈥淚 love Dallas, this is the best city in the world, we shouldn鈥檛 have any pension fund problems.鈥�
While a restructuring of investment allocations may help add money into the ailing pension fund, Dallas officials still need to present a plan to state regulators that details how the billions in unfunded liability will be remedied. That deadline is November 1.
Got a tip? Email Nathan Collins at ncollins@kera.org. You can follow Nathan on Twitter .
四虎影院 is made possible through the generosity of our members. If you find this reporting valuable, consider today. Thank you.
