In Unprecedented Move, Dallas Pension System Suspends Withdrawals

Is this the canary in the US financial coalmine?

Two days after the Mayor of Dallas, Mike Rawlings, filed a lawsuit against the Dallas Police and Fire Pension system to block withdrawals, which he referred to as a “run on the bank” of an “insolvent” pension system in “financial crisis, the Pension’s board has finally taken steps to halt further withdrawals.  Of course, this delayed action has come only after $500 million in deposits have been withdrawn since just August.

According to the Dallas Daily News, an incremental $154mm in withdrawal requests were pending at the time the decision was made earlier today.

The Dallas Police and Fire Pension System’s Board of Trustees suspended lump-sum withdrawals from the pension fund Thursday, staving off a possible restraining order and stopping $154 million in withdrawal requests.

The system was set to pay out the weekly requests Friday. Pension officials said allowing the withdrawals would leave them without the liquid reserves required to sustain $2.1 billion fund.

“Our situation is currently critical, and we took action,” Board chairman Sam Friar said.

End of quote.

Is that the flap of a butterfly wing I hear that will trigger the financial tornado?

Richard

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