Updated October 7, 2026. Quick answer: A member of the Employees’ Retirement Fund of the City of Dallas (ERF) picks one of three payment options when applying to retire: Life with 10-year certain, Joint and Half Survivor, or Joint and Full Survivor. The choice cannot be changed after retirement. A vested member who leaves with five or more years can leave contributions in the Fund for a deferred pension or take a refund. A refund forfeits the future pension, pays no interest according to the ERF guides, and carries 20% mandatory withholding on pretax money not rolled over. A refund can be repaid with interest after rehire within six years.
Texas police and firefighters in some cities belong to local systems with their own rules: San Antonio Fire and Police pension decisions and Austin Police Retirement System decisions.
Fort Worth city employees belong to a separate city fund with its own rules: Fort Worth ERF retirement decisions.
What this page covers and what it does not
This page works from documents published by the Employees’ Retirement Fund of the City of Dallas (ERF): its Tier A and Tier B member guides, four web pages and three forms, all read on October 7, 2026. The guides carry no edition date in their text and sit at a web address dated 2020-08. The web pages and forms are newer, and where they differ from the guides the difference is flagged below. ERF’s tier summary says Tier A members entered the plan with “PLAN ENTRY: On or before December 31, 2016” and Tier B members with “PLAN ENTRY: After December 31, 2016”. Most rules below have a Tier A and a Tier B version. Taxes are covered on Texas retirement taxes and does Texas tax pensions, and the comparison across systems is public pension retirement decisions by system.
When a pension can start and what the formula pays
For Tier A, ERF’s web page says “Under Normal Retirement, you can retire at age 60 with no minimum service requirement.” It also says “Service Retirement states that you can retire after 30 years of credited service regardless of your age; however, if you are under age 50 at retirement, your pension will be actuarially reduced.” The cut is shown by example: “at age 49, it will be reduced by 6.7%; at age 48, it will be reduced by 12.8% and so on”. For Tier B, “Under Normal Retirement, you can retire at age 65 with 5 years of pension service.” Its service route is stated this way: “Service Retirement states that you can retire after 40 years of credited service regardless of your age; however, if you are under age 65 at retirement, your pension will not be reduced.”
The formula for Tier A is “(Years of Service) x (2.75%) = % Monthly Salary Earned” and then “(Average Monthly Salary) x (% Monthly Salary Earned) = Estimated Monthly Pension”. For Tier B it is “(Years of Service) x (2.5%) = % Monthly Salary Earned”.
A computed example from assumed figures, not ERF figures: a Tier A member with an assumed 25 years of service credit earns 25 times 2.75%, a computed 68.75% of average monthly salary. With an assumed average monthly salary of $5,000, the estimated pension is $5,000 times that percentage, a computed $3,437.50 a month. A Tier B member with the same assumed 25 years and $5,000 would earn 25 times 2.5%, a computed 62.5%, or a computed $3,125.00 a month. The real figure depends on the member’s own pay and credited service as ERF counts them.
The election: three payment options and what each does for a survivor
ERF’s guides describe one choice for both tiers. “You will choose an option when you retire and apply for benefits; you cannot change your choice after you retire.” Every option carries a ten year guarantee: “All pension benefits are guaranteed for ten years.” The qualified recipient is a narrow group: “Only qualified recipients; your spouse, dependent or disabled child or dependent parent are entitled to monthly survivor benefits for life.” A member with no one in that group must take the Life option.
| Option | What the member receives | What a survivor receives |
|---|---|---|
| Life with 10-year certain | Full (unreduced) benefit for the member’s lifetime | If the member dies before 120 monthly payments, the beneficiary receives the same monthly benefit for the balance of the 120 months |
| Joint and Half Survivor | Unreduced for Tier A, shown as reduced for Tier B on the newer documents | One-half of the member’s monthly benefit for the beneficiary’s life (guide example: $525 from $1,050) |
| Joint and Full Survivor | A reduced benefit for life (guide example: $1,050 becomes $931) | The same monthly amount the member received, for the beneficiary’s life (guide example: $931) |
On Joint and Half, the guide says: “This option pays you unreduced benefits for your lifetime.” It adds that “a beneficiary receives one-half of your monthly benefit for the rest of his or her life”. The newer documents split by tier. The application’s text for a Tier A member reads: “You may elect to receive an unreduced pension that would, upon your death, pay your qualified recipient one half of the pension amount you were receiving for the rest of his or her life.” For a Tier B member it reads: “You may elect to receive a reduced pension that would, upon your death, pay your qualified recipient one half of the pension amount you were receiving for the rest of his or her life.” The guides describe the payment as unreduced without separating tiers, so a Tier B member should ask ERF for a written estimate before electing.
Joint and Full, and the numbers behind the trade
Joint and Full is the option that continues the whole payment to a survivor, at a reduced benefit for the member. The guide says “This option pays you reduced benefits for your lifetime.” “The benefit is calculated according to your age and your beneficiary’s age when you retire.” The Tier A guide limits it: “This option is available to you only if you have at least 15 years of credited pension service or you are at least age 60 when you retire.” The Tier B guide sets the age at 65 instead. The newer application words the condition as “a member or inactive member who is retiring with 15 or more years of credited service”, so a member near the line should ask which wording governs.
ERF’s guide shows the size of the trade once. “Marilyn’s monthly benefit of $1,050, is reduced to $931 using a formula to estimate how long both she and her beneficiary will live.” Under Joint and Half, “Her beneficiary then receives half of the benefit amount, $525, each month until the beneficiary’s death.” A computed example from those guide figures, not a forecast for any member: the Joint and Full reduction is $1,050 minus $931, a computed $119 a month, or a computed 11.3% of $1,050. In return the survivor receives $931 instead of $525, a computed $406 a month more, for life. For the general trade, see single-life versus joint-and-survivor pension.
What is irrevocable, who signs, and when to decide
The election is permanent once retirement starts. “You may not change your survivor option or your qualified recipient after retirement.” ERF’s application says the member and, if married, the spouse “in the presence of a Notary Public, have selected the survivor option circled below and signed directly below the option selected”, with a line headed “Spouse’s Signature” under each option. The guide adds: “If your spouse wishes to waive the pension benefit upon your retirement or death, he or she must sign and have notarized a Spousal Waiver Form.” On divorce: “If you and your spouse divorce, that spouse is automatically no longer your beneficiary”. The pages read do not say what a waiver does to the options available, so a married member should confirm the spousal steps with ERF before applying.
Leaving before retirement: the three choices
ERF’s Leaving the City page says that “they have three options regarding their pension; to maintain their vested status with five or more years of pension service, take a refund of their contributions or roll their contributions into another qualified retirement plan”. The choice turns on vesting. “Any employee who has contributed to the Fund for five years is considered to be vested in the Fund.”
A member who is not vested has nothing to leave behind: if under 60 (Tier A) or 65 (Tier B) with fewer than five years, “you are not vested and must take a refund of your contributions or roll them over into another qualified plan”. The 2020 guides add a limit the newer pages do not repeat: “If you leave the City with less than five years of credited pension service, you must make a written request for a refund of your contributions within three years of your termination.” “If you do not make this request within three years, you will forfeit your contributions.” Which statement is current for a recent leaver is one to confirm with ERF.
A vested member who leaves chooses between a deferred pension, which is paid later, and a refund or rollover, which forfeits the pension. For the general framework, see pension refund versus leaving it.
Leaving the money in: the deferred pension
“If an ERF member with at least five years of credited pension service leaves employment with the City and leaves their money in the ERF pension plan, they are considered a deferred vested member.” The web page adds: “Members are entitled to retirement benefits as long as you leave your contributions in the Fund.” The Refund Application treats deferral as the default: “If I do not return this form, my account will automatically be placed in deferred status until my retirement.” A deferred member keeps the refund door open, since the form says “I may request and receive a refund of my contributions, instead of a pension, at any time prior to my retirement”. On rehire, the guide says: “If you leave your contributions in the Fund and you are later rehired by the City, your total service credit will include your original period of service but will not include your break in service.”
Taking a refund: steps, what is forfeited, and no interest
ERF’s page says that “you will permanently forfeit any future retirement benefits from the Fund”. The City’s money stays behind: “Contributions made by the City of Dallas on your behalf are not refundable.” The guide says “Remember that no interest is paid on contribution refunds.” That comes from the 2020 guides; the newer page and form read do not state whether any interest is credited.
The steps: “Your termination must be processed in Workday.” “You must submit a signed and notarized Refund Application to ERF.” For longer service: “If you have worked for the City for five years or more, you must submit a signed and notarized Release/Waiver form.” On timing, “All refunds are issued on the last business day of each month, provided all necessary steps are completed by the 15th of that month.”
On tax, ERF’s form states: “A mandatory 20% federal income tax withholding applies to any pretax contributions that are not rolled over.” It warns that if the pretax part is not rolled over, “I will owe ordinary income tax on that amount and may also owe a 10% early withdrawal penalty”. A computed example from an assumed $12,000 of pretax contributions paid directly, not an ERF figure: 20% withholding is $12,000 times 20%, a computed $2,400, leaving a computed $9,600 in cash before final tax. Rolling over the whole $12,000 would need the withheld $2,400 from other money. See 20 percent withholding on a pension lump sum.
Rolling over instead of taking cash
ERF says that “A direct rollover allows you to defer federal income taxes on eligible pre-tax contributions until those funds are withdrawn from the receiving retirement account.” On the form, “You may roll over all or a portion of your funds.” It also warns: “No changes can be made after the Rollover process has begun.” The pages read present a rollover as an alternative to the direct refund, so the pension question is the same one. For the lifetime comparison, see pension lump sum versus monthly annuity break-even.
Coming back: repaying a refund and other service credit
A refund is not always final. ERF’s Former Employees page says: “you may elect to receive credit for your prior service by making a one-time payment to ERF equal to the amount withdrawn plus interest”. “This buy back can only be made after one year with the City but must be made no later than three years after your return.” The Refund Application lists the conditions: “under current law, to restore this service credit, I must (a) return to City employment within six years; (b) be reemployed for twelve consecutive months; (c) be employed by the City when I make a lump sum payment of both principal and interest; and (d) make the payment within three years of my reemployment”. It cautions that “the Plan provisions may be changed, and that my rights would be governed by the new provisions”. The interest rate is not stated on the pages read. The pension buyback calculator sets out the general method for sizing a repayment.
For members who joined on or after January 1, 2017, ERF’s application describes Restricted Prior Service Credit as “time credit only for vesting and retirement eligibility purposes and has no monetary value”. It can move a vesting or eligibility date but not the formula amount.
Cost-of-living adjustments
The cap differs by tier. For Tier A: “These adjustments are made in January and may not exceed 5% of your base pension, the pension amount you received when you first retired, and will be added to your current pension amount.” For Tier B: “These adjustments are made in January and may not exceed 3% of your base pension, the pension amount you received when you first retired, and will be added to your current pension amount.” The pages read do not give the percentages actually paid in any year.
What the IRS adds on tax
A refund or lump sum from a public pension is a distribution, so the IRS rules apply on top of ERF’s own. On withholding, the IRS says that a taxable eligible rollover distribution paid to you “is subject to mandatory income tax withholding (generally at a rate of 20%), even if you intend to roll it over later”, and that if you roll it over yourself “you’ll have to add funds from other sources equal to the amount withheld”. ERF’s Refund Application says the same: pretax contributions that are not rolled over carry mandatory 20% federal withholding, and a 10% early withdrawal penalty may apply. The rollover clock, if the money is paid to you: “you have 60 days from the date you receive it to roll it over to another eligible retirement plan”.
On early distributions the IRS says “the law imposes a 10% additional tax on certain early distributions from certain retirement plans”. Its list of exceptions includes “Distributions made to you after you separated from service with your employer after attainment of age 55” and “Distributions made to a qualified public safety employee from a governmental plan” if the employee separated from service during or after the year they attained age 50 or 25 years of service under the plan, whichever is earlier. Whether an exception fits a particular refund depends on your own plan and facts, so confirm it with a tax preparer before you take one.
What this page could not settle
- The pages read do not state the percentage reduction for the Joint and Full option at any age pair; ERF’s guide says only that it is calculated from the member’s age and the beneficiary’s age, so a written estimate is the way to get the figure.
- The pages read do not state the Joint and Full eligibility rule in one consistent form: the guides give 15 years of service or age 60 (Tier A) or 65 (Tier B), while the newer application names 15 or more years of credited service.
- The pages read do not state whether a refund credits any interest in the current plan; the only statement found is the 2020 guides saying that no interest is paid.
- The pages read do not reconcile the 2020 guides’ three year refund request deadline with the web page’s statement that a member with under five years must take a refund or roll over.
- The pages read do not describe a deferred retirement option program, a partial lump sum or any lump sum at retirement; the only lump sums described are the refund, the buy forward payment and the death benefit to a designee.
- The pages read do not say what a spousal waiver does to the available options, or how a survivor’s benefit is adjusted after the member dies.
Common mistakes
- Choosing a payment option and assuming it can be changed later; ERF’s guide and application say the choice cannot be changed after retirement.
- Assuming Joint and Half is unreduced for every member; the application and web page show it as unreduced for Tier A and reduced for Tier B.
- Taking a refund of contributions without realizing it forfeits any future retirement benefit from the Fund, and that the City’s contributions are not refundable.
Related on this site: pension refund versus leaving it, single-life versus joint-and-survivor pension, pension buyback calculator, 20 percent withholding on a pension lump sum, pension lump sum versus monthly annuity break-even, Texas retirement taxes, does Texas tax pensions and public pension retirement decisions by system.
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Answer againSources
- Employees’ Retirement Fund of the City of Dallas (ERF), Tier A Member Guide (PDF, undated text, file path dated 2020-08): https://www.dallaserf.org/sites/default/files/2020-08/Tier%20A%20Member%20Guide.pdf
- Employees’ Retirement Fund of the City of Dallas (ERF), Tier B Member Guide (PDF, undated text, file path dated 2020-08): https://www.dallaserf.org/sites/default/files/2020-08/Tier%20B%20Member%20Guide.pdf
- Employees’ Retirement Fund of the City of Dallas (ERF), Leaving the City (dallaserf.org web page): https://www.dallaserf.org/leaving
- Employees’ Retirement Fund of the City of Dallas (ERF), Former Employees (dallaserf.org web page): https://www.dallaserf.org/former-employees
- Employees’ Retirement Fund of the City of Dallas (ERF), Active Employees (dallaserf.org web page): https://www.dallaserf.org/active-employees
- Employees’ Retirement Fund of the City of Dallas (ERF), Retirement Application (PDF form, file path dated 2026-05): https://www.dallaserf.org/sites/default/files/2026-05/Application-Retirement%20-%20ADA.pdf
- Employees’ Retirement Fund of the City of Dallas (ERF), Refund Application and Special Tax Notice (PDF form, file path dated 2026-08): https://www.dallaserf.org/sites/default/files/2026-08/Refund%20Application-Tax%20Notice_0.pdf
- Employees’ Retirement Fund of the City of Dallas (ERF), Restricted Prior Service Credit Application and Instructions (PDF form, file path dated 2026-05): https://www.dallaserf.org/sites/default/files/2026-05/Application-Restricted%20Prior%20Service%20Credit%20-%20ADA.pdf
- Employees’ Retirement Fund of the City of Dallas (ERF), Steps to Retirement (dallaserf.org web page): https://www.dallaserf.org/steps-to-retirement
- IRS, Topic no. 413, Rollovers from retirement plans (irs.gov): https://www.irs.gov/taxtopics/tc413
- IRS, Topic no. 558, Additional tax on early distributions from retirement plans other than IRAs (irs.gov): https://www.irs.gov/taxtopics/tc558
Sources: the primary documents linked above, read on October 7, 2026. General information from each system’s own published materials, not legal, tax or financial advice. Your own member statement and the system’s current rules decide your benefit, and a pension counsellor at the system or a fee-only adviser is the right place to confirm anything consequential.