Statement of Mike Rawlings concerning the Dallas Police and Fire Pension System litigation:

This afternoon, Mike Rawlings withdrew from his lawsuit against the Dallas Police and Fire Pension
System Board, leaving defense of the remaining $2.1 billion in the Pension Systems Fund in the capable
hands of the four City Council members who recently intervened in the case and their attorneys.

The decision was made to better position the trial court to gain oversight of this matter.

Background:

In early December 2016, Mr. Rawlings filed a lawsuit against the Pension Systems Board, seeking judicial
intervention to stop the payment of funds under the DROP program. Mr. Rawlings sought judicial
intervention after the Pension Systems Board recklessly allowed approximately $500 million in lump-
sum DROP distributions within less than a four-month span. This run on the bank reduced the $2.7
billion fund to approximately $2.1 billion, and reduced the time over which monthly pension annuities
could be paid to Pension System members from 15 years to less than 10 years. By law, the Pension
System should have been able to fund its members retirement benefits for at least 40 years before the
massive DROP payments were made.

Since the filing of the lawsuit, the bleeding has stopped and only a few million dollars have been paid
out. Recently, four City Council members intervened in the lawsuit, seeking the same relief Mr. Rawlings
had requested and a number of other remedies to protect the Fund. As these council members were
also co-trustees of the Pension System, they have a far greater array of legal weapons with which to
work.

Last week, the Pension System requested a hearing to attack Mr. Rawlings ability to seek injunctive
relief in this case. Mr. Rawlings won the hearing, but the Pension System immediately appealed. A
procedural device allowed the Pension System to appeal the trial court ruling and to stay the case
against Mr. Rawlings and the council members. That action meant that the trial court had no ability to
issue an injunction or otherwise stop the Pension System if it attempted to pay out huge sums under the
DROP program.

This was particularly problematic because just days ago the director of the Pension System swore in a
declaration that she intended to recommend to the Pension Systems Board on March 9 that the Board
distribute between $100 million and $280 million in DROP payments on March 31, for March alone. This
recommendation would be pursuant to the DROP Addendum, under which the Board plans to
continually liquidate assets to pay out such huge sums of money on a monthly basis, if possible.

Decision to withdraw:

The most expeditious way for the trial court to gain oversight of this matter again, and to put it in a
position of being able to grant injunctive relief, was for Mr. Rawlings to immediately withdraw from the
lawsuit, procedurally ending the appeal and the stay. That is why Mr. Rawlings has taken that action
today.

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While Mr. Rawlings hopes that the Board restrains itself and holds off voting any more money out of the
fund until legislative action can be taken to repair the Pension System, he is relieved that the Board is
once again subject to judicial oversight.