Proposition 1 Passes on November 8, 2016

Changes to Chapter 40A

Thank you for taking the time to inquire about the changes to Chapter 40A. As your pension fund, we strive to represent you and give you information on any and all changes necessary to the pension. The following is a list of questions and answers to your potential concerns about the changes. These changes were approved by the citizens of Dallas in November 2016.

What is Chapter 40A?

Chapter 40A of the Dallas City Code is the document that governs your pension.

Who do the changes to Chapter 40A affect?

These changes will only affect employees hired on or after January 1, 2017. Current active employees, deferred vested employees and retirees will not be affected by the proposed changes to Chapter 40A.

Why are changes being made to Chapter 40A?

The changes are being made to address the fact that employees are living longer in retirement. These plan amendments will establish a new tier of benefits. Current active employees and retirees will be in Tier A, and employees hired on or after January 1, 2017 will be in Tier B.

What will happen if I leave the city and come back?

Information on Leaving Employment with the City of Dallas
Information on Returning to Employment with the City of Dallas

That depends on how much pension service you had when you left, whether you withdrew your contributions upon your termination, and how long you were gone. You will be in Tier A only if one of the following apply:

1) you had at least five years of pension service when you left and you did not withdraw your contributions;
2) you withdrew your contributions but you returned to work for the city within six years of your termination and you repurchased your service within three years of your return.
3) you had less than five years of pension service when you left the city but returned to work within six years of your termination and had not taken a refund of your contributions;

Members who fall into category 3 may have to fill out a reinstatement application. If you are in this situation, click here to contact us for more information.

What will happen to my $125 health supplement? Is it being taken away?

No; current members and retirees will still receive the health supplement. The health supplement is being discontinued only for employees who are hired on or after January 1, 2017.

How are the benefits for Tier B members different?

The main changes are these:

  1. The benefit multiplier is reduced from 2.75% to 2.5%.
  2. The Normal retirement age is increased from 60 to 65 and, in order to qualify for an age retirement, a member must have at least five years of credited pension service.
  3. The Rule of 78 is replaced by the Rule of 80, and the benefits of those who retire before age 65 will be actuarially reduced.
  4. Service retirement is increased from 30 years to 40. There is no actuarial reduction prior to age 65 for service retirements.
  5. The Joint and Half survivor benefit will be actuarially reduced.
  6. The Health supplement of up to $125 is eliminated.

Will the contribution rate be different for Tier B members?

No. The contribution rate will be the same for Tier A & B members. The employee contribution rate as of October 1, 2015 is 13.32%.