Frequently Asked Questions What is the Employees' Retirement Fund? Q: What is the Employees' Retirement Fund? The Employees' Retirement Fund of the City of Dallas is a single employer defined benefit pension plan sponsored by the City of Dallas for the benefit of its members. Q: How much do I contribute to the Fund? As of October 2005, members contribute 9.03% of their pay before taxes to the Fund. Q: How much does the City contribute for me to the Fund? The City contributes 15.38% into the Fund, on behalf of each member as of October 2005. The total percentage being invested for each employee every pay period is 24.41%. Q: Can I borrow from my ERF contributions? You can not borrow money from your ERF contributions. Q: Does ERF accept service credit from cities an employee has worked for in the past? ERF does not accept service credit from other cities you have worked for in your past employment. The Board of Trustees governs the Fund. The Board is made up of seven members • ERF active members elect three Trustees Elections for the employee elected Trustees are held annually. The elected Trustees serve for two-year terms. The Board of Trustees appoints the Executive Director of the Fund. The Executive Director hires the Fund's staff. The staff is responsible for the day-to-day operations of the Fund, including investments, benefit administration, and communications. Q: Where can I find a copy of the Fund's Annual Report? An Annual Report and Condensed Annual Report are published to give members an overview of the financial condition of the Fund. Newsletters, brochures and this web site are also a means of communicating to the members, as well as seminars held by Human Resources and the Fund. Contact the ERF office for a copy of the annual report. Q: When am I eligible to retirement? There are several ways you become eligible for retirement, as explained below: Normal retirement —Age 60 is the normal retirement age. So if you retire at or after age 60, you will receive a normal retirement benefit. Early retirement — You may retire at age 55 if your credited service began before May 9, 1972. Rule of 78 — You may retire at or after age 50 if your age and years of service credit added together total at least 78. Service retirement — You may receive retirement benefits when you have 30 years of service credit. If you are under age 50 when you retire, your monthly benefit will be reduced. Refer to 40A, Section 16 of the Dallas City Code for the age reduction table. Q: How do I figure out my monthly pension? Use the following formula to estimate your pension; • Add the three highest earning years together. Your credited pension service is the time in years, months and days that you contributed to the Fund, including vacation time but not including Leave of absence without pay. The 2.75% is a fixed multiplier, set by the Board of Trustees and approved by City Council and the citizens of Dallas in 1989.
It is best to call to make an appointment and we can project your pension for you as everyone has different pay with different years of service. Q: Can I retire before the age of 50? If you are under age 50 when you retire, your monthly benefit will be reduced. Refer to 40A, Section 16 of the Dallas City Code for the age reduction table. For example Julia is 48 years old when she retires after earning 30 years of service credit. Her retirement benefit is calculated at $2,000 per month, but because she is retiring before age 50 she will receive 87.2% of this monthly benefit:
Q: Does the Fund provide Survivor Benefits? Yes ERF does have survivor benefits for active and retired members. Service death benefits Fund pays service death benefits to the member's beneficiary. The death benefit is calculated on the greater of 10 years of service credit or the member's actual service credit. The minimum service death benefit is $500 per month. Non-service death benefits • Less than two years of service credit—your beneficiary will receive a refund of your contributions and no death benefits will be paid. If you are single, a lump sum payment will go to whomever you designate on the designee form . If you do not have a designee form on file with the Fund a lump sum payment will go to your estate, unless you have a dependent minor child, less than 18 years old, or a disabled child of any age that was disabled before age 18 or a dependent parent. All employees should fill out a designee form. It determines who will get the lump sum payments for those who are single. This is also a good idea for married employees, just in case something happens to both you and your spouse at the same time. You can call us to have a designee form sent to you or you can come to our office to fill out a designee form. The form does need to be notarized. It is important to fill out a designee form so if something happens to you; your heirs will not be tied up in court with lawyers. There are cases still pending payments because no designee was established. We still have the money in the Fund not knowing who to pay. Q: What are my survivor options? There are 3 options you can choose from when you retire: Life with a 10 year certain, joint and one half with 10 year certain, or joint and full with 10 year certain. *120 monthly payments = Ten years 1. Life with 10 years certain This option pays you full (unreduced) benefits for your lifetime. If you die before receiving 120 monthly (10 years) payments, your spouse receives the same monthly benefit for the balance of the 120 months. If you have no eligible beneficiary, your designee receives a final lump sum payment equal to the present value of the remainder of the 120 monthly payments. 2. Joint and one half option with 10 years certain This option gives you an unreduced pension for life when you retire. After you die, if your spouse is still alive, he/she will get one half of the benefit you were receiving for the rest of their life. If you both die before receiving 120 monthly payments, your designee receives a final payment equal to the present value of the remainder of the 120 monthly payments. 3. Joint and full option with 10 years certain This option is available to you only if you have 15 or more years of credited pension service or you are age 60. With this option, you get an actuarially reduced pension for life. The reduction is based on the differences in your age and your spouse's age. After you die, if your spouse is still alive, they will get the same payment you were receiving for the rest of their life. Examples of each option are available in the Highlights brochure , on page 12. Q: What happens to my ERF contributions if I decide to terminate my employment with the City of Dallas? If you leave the city with less than 5 years of service, you must apply for a refund within 3 years of leaving, or your contributions are forfeited. You only get a refund of what you contributed. You will pay 20% federal income tax, unless you roll it over into an IRA or other qualified plan. At the end of the year ERF will send you a Form 1099 to file with your income tax you may incur another 10% tax payment. If you leave the City with more than 5 years, you can leave your contributions in the Fund and defer your benefits until you reach retirement age (age 60) and draw a pension at that time. If you come back to work for the city, and were refunded your contributions when you left, you can “buy back” your pension service time. This means you have to put the refunded money back into the Fund with interest. Conditions and restrictions for buying back your service: • First, you have to come back to work for the City within 6 years of leaving. Q: If I become disabled can I receive disability retirement? You may qualify for disability retirement if you become unable to work because of an illness or injury that leaves you totally and permanently disabled. Total and permanent disability means you have the continuing inability to secure and keep any type of employment. The Fund's Board of Trustees must approve disability retirements. There are two types of disability retirement: • Service Disability —if you become totally and permanently disabled while performing your job, you are eligible to apply for service disability benefits. There is no minimum service requirement. • Non-service Disability —if your disability is not related to your work, you may apply for non-service disability benefits. The following Fund members are eligible for non-service disability retirement: The Board's procedures governing the disability application process are explained in “Disability Rules and Procedures,” a document you can request from the Fund office. Service disability benefits • $500 a month or Non-service disability benefits Q: What is the Health Supplement? To help you manage the costs of health care after you retire—or to help your beneficiaries after your death—the Fund pays a health benefit supplement in addition to the normal retirement benefit. You receive $25 per month for each full year of service credit, up to $125 a month. Q: Can I receive my pension payment in a lump sum? No. When you retire, your only option is to receive a monthly benefit. Q: What do I need to do before I can retire? • Complete the ERF retirement application Q: When can I expect my first retirement check? Receipt of your first retirement check depends on your termination date. Click here to view a copy of the retirement check schedule based on the time frame of your termination.
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