MIDLAND, Texas — The City of Midland held a press conference on Tuesday to discuss the Midland Fireman’s Relief and Retirement Fund.
Earlier in 2023, the pension fund received an update on where it currently stood following evaluations that started in November of 2021.
The Midland Fire Department, or MFD, has grown over the past six years, but it’s underfunded pension fund has done the same.
“Midland Firefighter’s Retirement Fund Pension is about $109 million underfunded," said Chad Clark, chair on the board of trustees. "I say that not lightly. That’s a significant amount of money, and it’s going to take a significant amount of effort to fix that.”
The city noted that it has taken 10-15 years for it to get to this point due to a number of reasons, and now they are working to get it resolved.
Clark highlighted that current pension benefits not being sustainable, overtime payments when the fire department was short on staff and low investment returns are factors that led to the problem.
MFD is now just 10 firefighters short as it actively recruits, and two upcoming votes by the fire department are expected to help the pension troubles.
“One of those being unscheduled overtime, the other one would be your high-60 and how that’s calculated," said Midland Mayor Lori Blong. "We’re asking for your partnership in this decision so that we can say that we’re doing this together. The city is going to be partnering with you and moving forward in making up this difference of $109 million.”
Partnership between Midland and its fire department is key, as well as outside support from consulting firms, including for investment decisions.
“There will have to be a change in our investment strategy, and part of bringing this consultant in will help us to optimize that investment strategy — to help us offload the investments that are not sound, and to get money put into things that are going to have higher returns that are more stable and predictable and dependable for the fire department and for your families," said Blong.
The city is in the process of hiring a new investment advisor, and Clark added what that support will bring.
“They have a real knowledge of what’s out there and what’s going on, so they’ll be able to help us identify the changes that we need to make," said Clark. "And some of that’s asset allocation, and some of that’s simply just changing, maybe replacing the money manager who’s underperforming."
A team effort is needed as positive growth is now the hope from an unfortunate situation.
“It’s not one person or one entity that’s responsible, and along the same line, it’s not one person or one entity [that] can fix it," said Clark. "It’s going to take all of us working together to address the challenge and to fix it.”
The mayor mentioned that she believes they can make a significant impact by the end of the year in fixing the problem. She also stated that this is an issue that is important to the entire Midland community, so they will provide updates on the progress made.