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DALLAS - Today, the Dallas City Council adopted a plan that ensures the funding soundness of the Dallas Police and Fire Pension System (DPFPS) and protects the pension benefits of all police and fire first-responders – both active and retired. The City’s Plan will fully fund DPFPS within 30 years. The 14-1 vote directs the city manager to submit the City Plan to the State Pension Review Board not later than November 1, 2024. Currently, the DPFPS board managed fund is 39% funded and has a $3.2 billion unfunded liability.
“When Dallas makes a commitment, we keep it. We have promised to take care of both our active first responders and our retirees, and we will keep that promise,” said Dallas Mayor Eric L. Johnson. Today, we approved a plan to fully fund the Dallas Police and Fire Pension System that honors the men and women who have dedicated themselves to keeping our city safe. Public safety is and always will be my number one priority.”
While preparing the proposed FY 2024-25 budget, Interim City Manager Kimberly Bizor Tolbert and her team made deep cuts to close a $38+ million City operating budget shortfall while allocating the funds necessary to pay the first-year cost of the City’s plan for DPFPS. The challenge has been to fully fund the DPFPS shortfall while still ensuring that the City fulfills its obligations to the taxpayers. Although the City now has a state-imposed revenue cap, it has been able to balance the FY 2024-25 City operating budget while funding the DPFPS funding needs and while funding a 7.23% market pay increase for every active uniformed first responder.
What is the City of Dallas’ Proposed Plan?
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Over the next five years, the City of Dallas has committed to contributing more than $1 billion to DPFPS with a step-up in contributions.
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Over the next 30-years, the City of Dallas will contribute over $11 billion to ensure DPFPS is fully funded based on state law requirements.
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The Interim City Manager’s recommended FY2024-25 budget includes more than $200 million to begin fully-funding DPFPS within 30 years.
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Transition from a flat rate contribution to an actuarially determined contribution (ADC) that adjusts each year.
“Our goal has been to protect pension benefits for all of our city employees and retirees, ensure a balanced budget, and stay focused on the future financial health of the City,” said Mayor Pro Tem Tennell Atkins, Chairman of the Ad Hoc Committee on Pensions.
The City hoped to jointly formulate a plan with DPFPS that complies with state law to send to the State Pension Review Board. Due to pending litigation filed by the DPFPS board, the City’s Plan complies with the requirements of state law to fully fund DPFPS over 30 years but provides no supplemental pay. Future consideration will be given to components that go above the base requirements.
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