PROPOSED PENSION CHANGES

The Texas Pension Review Board (PRB) has updated the Funding Soundness Restoration Plan requirements for all pension funds in Texas.

The last time the PRB updated the requirements, in 2015, ERF created Tier B.  ERF has no plans to implement a new Tier of benefits to meet the new requirements.

HOW WILL THIS IMPACT YOUR PENSION NOW

To achieve the new Funding Soundness Restoration Plan guidelines, ERF proposes increasing the maximum employee contributions from 13.32% to 14%, an increase of less than one percent for Tier A members only.

The City's maximum contribution limit of 36% will be removed allowing the Restoration Plan to succeed in protecting the financial stability of the fund by reducing liabilities to zero by 2055.

*Employees that began their employment before January 1, 2017.

Understanding Your Retirement Fund

The Employees’ Retirement Fund (ERF) is governed by Dallas City Code Chapter 40A. Both City employees and the City of Dallas as the plan sponsor contributes to the Fund to ensure its long-term sustainability. The total cost of pension benefits includes the City’s contribution of 63% and current employee’s contributing 37% of the total rate.

Pension Contribution Rate Updates – Effective October 2025

Beginning with the first pay period in October 2025, employee and employer contribution rates to the Employees’ Retirement Fund will be updated in accordance with the State of Texas – Pension Review Board. This change represents a joint effort between the ERF Board of Trustees, the Dallas City Council, and 69% of Dallas voters in the November 2024 election.

New Contribution Rates (Effective October 2025)

Tier A Members
Contribution Rate: 14.00%
Change/Description: +0.68% increase (employees hired before January 1, 2017)

Tier B Members
Contribution Rate: 13.32%
Change/Description: No change (employees hired on or after January 1, 2017)

City of Dallas
Contribution Rate: 38.22%
Change/Description: (FSRP Corridor – City of Dallas’ contribution for 2026)

FUNDING SOUNDNESS RESTORATION PLAN

Funding Soundness Restoration Plans (FSRPs) are developed by Texas public retirement systems and their sponsors to improve the funding status of pension plans.

The FSRP requirements were established by the Texas Legislature in 2015 and updated in 2021.

The background leading up to the 2023 plan is as follows:

  • In 2015, Dallas ERF adopted more conservative assumptions, lowering the actuarial rate of return and adopting a new mortality table called generational mortality recommended by the Society of Actuaries.
  • Mortality tables measures life expectancy tied to the member's birth date and retirement date.
  • Future generations are expected to live longer, and the new generational mortality table significantly increases life expectancy assumptions for them, thus increasing future pension liabilities.
  • These assumptions led to the implementation of Tier B.

For more information about the Funding Restoration Plan, click here.

PENSION REVIEW BOARD

The Texas Pension Review Board (PRB) is mandated to oversee all Texas public retirement systems, both state and local, in regard to their actuarial soundness and compliance with state reporting requirements under Chapter 802, Texas Government Code.

To learn more about the Pension Review Board, click here.

STAY UP TO DATE

If you would like to sign up ERF emails and text messages regarding ERF Pension Updates, click the link below.

At this time text messages are only available to Active employees.

 

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