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*
In order to achieve the new Funding Soundness Restoration Plan guidelines, ERF is proposing an increase of the maximum employee contributions from 13.32% to 14%, an increase of less than one percent.
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.
For more information about the proposed changes, click the links below to view ERF presentations and watch videos of the City Council Ad Hoc Committee on Pensions.
* Current Proposed Changes will NOT impact Retiree Pensions
ERF EDUCATIONAL SEMINAR ARCHIVE
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.