Opinion
05-22-00644-CV
06-21-2024
DALLAS POLICE RETIRED OFFICERS ASSOCIATION, Appellant v. DALLAS POLICE AND FIRE PENSION SYSTEM AND NICHOLAS A. MERRICK IN HIS OFFICIAL CAPACITY AS CHAIRMAN OF THE BOARD OF TRUSTEES OF THE DALLAS POLICE AND FIRE PENSION SYSTEM, Appellees
On Appeal from the 192nd Judicial District Court Dallas County, Texas Trial Court Cause No. DC-21-11982
DISSENTING OPINION ON DENIAL OF MOTION FOR RECONSIDERATION EN BANC [
Justice Smith did not participate in the decision on the motion for reconsideration en banc.
OPINION
Joined by: Burns, C.J. and Partida-Kipness, Carlyle, and Garcia, JJ.
KEN MOLBERG JUSTICE
The annual adjustment and monthly supplement at issue in the panel opinion[ are service benefits accrued (i.e., earned by service) by City of Dallas police officers and firefighters before the effective date of the 2017 amendments to their pension plan that eliminated the annual adjustment and monthly supplement. It is unquestioned that those amendments impaired (reduced or eliminated) those benefits. As such, the amendments run afoul of Tex. Const. art. XVI, § 66.[ It's that simple.
Dallas Police Retired Officers Ass'n v. Dallas Police & Fire Pension Sys., No. 05-22-00644-CV, 2023 WL 7401504 (Tex. App.-Dallas, Nov. 9, 2023, no pet. h.) (mem. op.).
In 2003, Texas voters approved a constitutional amendment applicable to public retirement systems (other than statewide systems), which includes the Dallas pension system. The amendment, now article XVI, § 66 of the Texas Constitution, prohibits the reduction or impairment of certain benefits under local public retirement systems through later changes to the pension system. See Degan v. Bd. of Trustees of Dallas Police & Fire Pension Sys., 594 S.W.3d 309, 313-14 (Tex. 2020) (Article XVI, § 66 was added to "[protect] the amount of monthly pension payments from reduction or impairment through subsequent changes to the system.").
The panel majority's erroneous conclusion results from its unsupportable equation of the time at which benefits are paid with the time at which benefits accrue-a non sequitur in the pension benefits context of this case and immensely troubling at ground level. Accrued benefits, like those here, are earned by service[ and, as appellants note, "the demarcation line" for entitlement to any accrued benefit-like the fixed four percent annual adjustment and the $75 monthly supplement here-is when service ends (or the effective date of reforms if service has not ended), "not when payments are made years after retirement." Given that the benefits were accrued when service ended, the ultimate question becomes whether later, post-retirement changes to a pension plan impair or reduce the amount of the accrued benefits to which the retiree or his beneficiary would be otherwise entitled. In other words, do the changes affect "the bottom line-the actual payments" to the pensioner? Van Houten, 827 F.3d at 538 n.7. Here, the answer is an undisputed yes. Concededly, the amount of payments are reduced or eliminated because of the 2017 plan amendments. As such, the changes are constitutionally infirm.
Eddington v. Dallas Police & Fire Pension Sys., 589 S.W.3d 799, 804 (Tex. 2019) (accrued benefits under the constitutional provision "are those that have been earned by service, not those that may be earned by future service."); accord Degan, 594 S.W.3d at 314; see also Van Houten v. City of Fort Worth, 827 F.3d 530, 534 (5th Cir. 2016).
Neither Van Houten, Eddington, nor Degan rescues the panel's opinion. As easily seen, those are "impairment," not "accrual" cases. And in each, the court determined that the bottom line was not affected by post-accrual changes to the pension plan.[ That is not the case here. If anything, this trilogy of cases endorses the view that the very type of benefits before us are of the type that accrue through service and may not be impaired after that service ends.
See Van Houten, 827 F.3d at 539 ("Section 66 did not turn the plaintiffs' variable-rate [cost-of-living-adjustment] into a one-way ratchet capable only of upward movement."); Eddington, 589 S.W.3d at 805 ("The amendments to the System's plan reducing DROP [deferred retirement option plan] interest rates operated only prospectively, just as the changes at issue in Van Houten. For this reason, the change . . . did not violate Section 66."); see also Degan, 594 S.W.3d at 316 ("[L]ike Eddington, the reforms here do not affect the . . . the dollar amount of the funds previously credited to DROP.").
If the panel is right, article XVI, § 66 is rendered a nullity, and no pension benefit will be protected as contemplated by the constitutional provision, as intended by its framers, and as earned and expected by pensioners.
Because of the magnitude and implications of this error, which the en banc court chooses not to address, I dissent from the denial of the motion for en banc reconsideration.