DMN and WFAA Botch Police and Fire Pension Story

This morning I touched on the WFAA story by Brett Shipp about how much money the Dallas Police and Fire Pension System spends on staff travel. Shipp’s story is titled “Globetrotting Pension Fund Execs Raise Eyebrows.” It drove me nervous because it found that a $3.6 billion operation with investments all over the world spent a whopping $185,000 on travel last year. Yes, technically that means the execs are globetrotters. But come on. Is that travel expense really out of line? Shipp’s story provided no context. Just outrage.

So I was looking forward to reading the version of the story (paywall) published on the front page of the the Dallas Morning News. It runs to 1,500 words, and it took two people to write it (Steve Thompson and Gary Jacobson). And, thankfully, the newspaper story does offer some context. The reporters found that the Dallas Employees’ Retirement Fund, which handles money for civil workers, spent $136,000 on travel in 2011. That year, the DERF had $2.75 billion in assets under management. That means its travel expenses amounted to .0049 percent of its assets. The money spent on travel by the Police and Fire Fund, by comparison, amounts to .0051 percent of its assets. In other words, it’s practically the same ratio. The context provided by the DMN suggests that the Police and Fire Fund spends about what it should on travel — especially when you consider what sorts of investments they make (heavier on the real estate, lighter on the stocks and bonds).

There’s a story here to be told. It’s about how the Police and Fire Fund invests the retirement money of 9,000 cops and firefighters. How much risk has the fund exposed itself to? Is the fund generating returns high enough to justify that risk? The newspaper story does touch on the management fees that the Police and Fire Fund pays. Two sentences. That’s it. The rest of the story, though, appears to be a waste of ink and paper. The TV report was a joke.

When a watchdog barks at every passing car, you learn to ignore it.