On September 11, 2024, the Dallas City Council adopted a plan to ensure the financial stability of the Dallas Police and Fire Pension System (DPFPS) and protect the pension benefits of both active and retired first responders. The City’s plan, which passed with a 14-1 vote, aims to fully fund DPFPS within 30 years. The City Manager has been directed to submit the plan to the State Pension Review Board by November 1, 2024. Currently, the DPFPS fund is 39% funded, with 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. “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.”
In preparation for the proposed FY 2024-25 budget, Interim City Manager Kimberly Bizor Tolbert and her team made significant cuts to address a $38+ million City operating budget shortfall while ensuring funds were allocated to meet the first-year cost of the City’s pension plan. The challenge was to fully fund the DPFPS shortfall while still meeting the City's obligations to taxpayers. Despite a state-imposed revenue cap, the City has balanced the FY 2024-25 budget, provided the necessary funds for the pension plan, and approved a 7.23% market pay increase for active uniformed first responders.
The City of Dallas’ plan includes the following commitments:
- Over the next five years, the City will contribute more than $1 billion to DPFPS, with increased contributions over time.
- Over 30 years, the City will contribute over $11 billion to ensure DPFPS is fully funded in compliance with state law.
- The FY 2024-25 budget includes over $200 million to start the process of fully funding DPFPS within 30 years.
- The City will transition from a flat rate contribution to an actuarially determined contribution (ADC) that adjusts annually.
“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 initially hoped to develop a joint plan with the DPFPS board that complied with state law. However, due to pending litigation filed by the DPFPS board, the City’s plan, which meets state law requirements, does not include supplemental pay. Future considerations may address elements beyond the base requirements.
