Updated October 7, 2026. Quick answer: Under the Dallas Police and Fire Pension System plan document, a member leaving active service or a pensioner may elect an actuarially reduced benefit with a 100 percent joint and survivor annuity for a spouse, and the election cannot be revoked once filed. A Group B member with five years of pension service is vested, and a refund of contributions, paid without interest, cancels all pension service. A member who joins DROP loses refund eligibility. A Group B member hired on or after March 1, 2011 earns 2.5 percent of the highest 60 month average pay for each year, from age 58.
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 one document published by the Dallas Police and Fire Pension System (DPFP): the plan document posted on its Retirees and Beneficiaries pages, a PDF whose file name carries the date 9.01.23 and whose text is headed Article 6243a-1. It is cited here as the plan document read on October 7, 2026. It is a legal text, not a member handbook, so forms, estimates and board policies are left to DPFP. It describes a survivor election, the Deferred Retirement Option Plan (DROP), a refund of contributions, buying service and a cost-of-living adjustment, with no cash lump sum at retirement apart from a narrow DROP hardship rule.
State taxes are on Texas retirement taxes and does Texas tax pensions, and the system-by-system view is public pension retirement decisions by system.
Group A or Group B decides the rules
The plan splits members into two groups. Group A is the older one, built around the old plan and Plan A. Group B covers “any police officer or fire fighter who is initially employed as a police officer or a fire fighter by the city on or after January 1, 1993” and certain others the plan lists. A Group B member’s hire date then splits again at March 1, 2011.
Group A members need 20 years of pension service for a Group A pension, drawn from age 50 at 50 percent of base pay plus 50 percent of longevity pay. This page concentrates on Group B, where the age, formula and refund choices sit.
When a Group B pension can start, and the formula
Vesting comes first: a Group B member with five years of pension service has vested rights. The age and formula then depend on hire date.
| Group B hire date | Earliest age for the unreduced election | Pension formula |
|---|---|---|
| Began active service before March 1, 2011 | Age 50 and five years of pension service | Three percent of the 36 month highest average pay per year before September 1, 2017, plus a schedule percent of the 60 month average per year after |
| Began active service on or after March 1, 2011 | Age 58 and five years of pension service | 2.5 percent of the 60 month highest average computation pay for each year of service |
For the later group the plan says the pension is “the number of years of pension service, prorated for fractional years, times 2.5 percent of the average computation pay determined over the 60 consecutive months of pension service in which the member received the highest computation pay”. For the earlier group, the second part uses a percentage tied to age when the pension begins: 2.5% at age 58 and older, 2.4% at 57, 2.3% at 56, 2.2% at 55, 2.1% at 54, and 2.0% at 53 and younger, under a schedule the plan heads “Age of Member When Retirement Pension Begins”.
The pension has a ceiling: the plan caps the pension at the greater of “90 percent of the member’s average computation pay” or the benefit vested and accrued on August 31, 2017. A computed example from assumed figures, not DPFP figures: a member hired on or after March 1, 2011 with an assumed 25 years of pension service and an assumed $6,000 average computation pay would have a formula pension of 25 times 2.5% times $6,000, a computed $3,750 a month, well under the ceiling.
A pensioner who returns to a police or fire job loses the pension for the time being: it “ceases until that person again leaves active service with the city”.
Retiring before the full age: the actuarial reduction
A Group B member who qualifies can start earlier at a price. The pension is first calculated under the normal formula and then “reduced by two-thirds of one percent per month” for each whole calendar month it is paid before the member reaches age 58 (or, for some members, 50).
A computed example from assumed figures, not DPFP figures: a member who starts 36 whole months before 58 (age 55) takes 36 times two-thirds of one percent, a computed 24% reduction. On an assumed $2,500 monthly pension from the formula, the reduced pension would be 2,500 times (100 minus 24) divided by 100, a computed $1,900 a month. That shows only the stated rate, because “the board by rule may adopt alternative multipliers”. The pages read show no such table, so current multipliers are one to request from DPFP.
The survivor election and what is irrevocable
The plan has the board adopt policies under which “a member who is leaving active service or a pensioner may elect to accept actuarially reduced benefits to provide the following optional benefits”: “a 100 percent joint and survivor annuity with the member’s or pensioner’s spouse”; a smaller option for a later spouse, elected “provided the election is made not later than one year after the date of the marriage”; and “a death benefit for a child who is not a qualified survivor because the child was born or adopted after the member left active service, but only if the child: (A) is a dependent of the pensioner, within the meaning of Section 152(a)(1) of the code; and (B) has not attained 18 years of age at the time of the election”.
| Option | What the pensioner receives | What a survivor receives |
|---|---|---|
| Standard pension, no election | The pension from the formula above | The plan’s death benefit sections apply; this page does not summarize them |
| 100 percent joint and survivor annuity with the spouse | An actuarially reduced pension | The surviving spouse receives a pension equal to the reduced pension the pensioner was receiving at death |
| 50 percent joint and survivor annuity with a spouse who is not otherwise a qualified survivor | An actuarially reduced pension | The surviving spouse receives 50 percent of the reduced pension the pensioner was receiving at death |
| Death benefit for a later born or adopted child | An actuarially reduced pension | A death benefit for the child, based on the reduced pension |
The reduction is not a fixed percentage. The plan says the result is “the actuarial equivalent of the pension and death benefits, if any, that would have been payable, at the time of the election, if the election had not been made”. The pages read give no table of reduction factors.
A computed example from an assumed $2,000 reduced monthly pension, not a DPFP figure: the survivor would receive 100% of $2,000, a computed $2,000 a month, under the 100 percent option, or 50% of $2,000, a computed $1,000 a month, under the 50 percent option for a later spouse. For the general trade, see single-life versus joint-and-survivor pension.
Several rules matter after the election. On revocation: “An election under this section may not be revoked by the member or pensioner after it is filed with the pension system”. There is no pop-up if the spouse dies first: “The actuarially reduced benefits being paid to the pensioner under this section will not be increased if the spouse dies before the pensioner, or if the child attains 19 years of age before the pensioner dies”. A pensioner who wants the larger option after electing the smaller one “shall incur a second actuarial reduction in benefits to pay for the increased survivor annuity”. Under the plan, a person is not entitled to the payment of benefits where a pensioner makes an election after leaving active service and “dies within one year after making the election”, with an exception for a 100 percent election with a spouse who is a qualified survivor at the time.
DROP: staying on the job while the pension accumulates
DROP is the plan’s nearest thing to a lump sum, but it pays out as an annuity. A member who stays on after becoming pension eligible “may become a participant in the deferred retirement option plan” and “defer the beginning of the person’s retirement pension”. The election also ends the refund option: “On and after the effective date of the election, the member will no longer be eligible for any refund of contributions”.
Each month, an amount equal to the pension the member would have received on the DROP effective date “shall be credited to a separate DROP account maintained within the fund for the benefit of the member”. The pension is frozen as of that date, and the member “does not accrue additional pension service for purposes of computing a retirement pension”. Also, a member on active service with “10 years or more of participation in DROP” stops having the pension credited to the account.
The money is locked while working: “A member may not receive a distribution from the member’s DROP account while the member is on active service”. After leaving active service, the balance is paid as an annuity: the plan says it is distributed “in the form of an annuity, payable either monthly or annually at the election of the member”, over the member’s life expectancy with “mortality tables recommended by the pension system’s qualified actuary”.
On interest: “The DROP account of a member who begins participating in DROP on or after September 1, 2017, does not accrue interest”. A computed example from assumed figures, not DPFP figures: a $4,000 monthly pension credited for 60 months with no interest would build a balance of 4,000 times 60, a computed $240,000. Spread evenly over an assumed 20 years, or 240 months, that is $240,000 divided by 240, a computed $1,000 a month. The plan uses mortality tables recommended by its actuary, not simple division, so this shows only scale, not the payment.
A cash-out is not a standard option. The board may allow a recipient to “obtain a lump-sum distribution from the person’s DROP account resulting in a corresponding reduction in the total number or in the amount of annuity payments”, and the plan limits that to a hardship that was not reasonably foreseeable. That is a board rule to check with DPFP. See pension lump sum versus monthly annuity break-even for the general comparison.
The DROP balance does not follow the survivor election. A married member “is considered to have designated the member’s or pensioner’s spouse as the member’s or pensioner’s beneficiary” unless a different designation is made under board policy.
Leaving before a pension: vesting and the refund of contributions
For a vested Group B member who leaves before a pension age, the plan says “the person shall be provided with a letter approved by the board and signed by the executive director”. That letter states “the monthly retirement pension due the Group B member at age 58”, the figure to set against a refund.
A refund is also open. It returns the “total amount of the member’s Plan B and Group B contributions, without interest, that were paid beginning with the effective date of the member’s Group B membership or membership in Plan B”. The cost: the plan says it “results in a total cancellation of pension service credit” and that the member “is not entitled to any benefits from the pension system”. Only some contributions qualify: “Old plan or Plan A contributions paid to the fund by a Group B member may not be refunded from the fund”. See pension refund versus leaving it for the general framework.
The member must apply in writing to the executive director. A member with five or more years who first entered service before 1999 can take a partial refund; a member who entered on or after January 1, 1999 is entitled to the total refund, “but may not receive a refund of less than the total amount”.
A deadline can end the choice. Under the plan, if a member with five or more years “fails to make written application for a refund of the person’s Plan B and Group B contributions within three years after the date of the notice described by Subsection (j) of this section made by the board, the person forfeits the right to withdraw any portion of the contributions”. The three years run from a board notice, which the board attempts to send by registered or certified mail on the member’s 58th birthday, so a missed deadline is worth raising with DPFP.
A member who returns can undo a refund at a price: the plan lets a Group B member repay withdrawn contributions with interest, “calculated at the interest rate from time to time used in the pension system’s actuarial rate of return assumptions, compounded annually”.
Buying service credit
A Group B member on active service who earlier declined to contribute “may purchase pension service from the fund for that period during which the member performed active service with either department until the effective date of the member’s Group B membership”. On cost: payment equals “the amount of contributions the Group B member would have made to the old plan and Plan A”, “plus interest calculated in accordance with procedures adopted by the board from time to time”.
A deadline applies: if the purchase is not paid in full by the earlier of starting DROP or leaving service, the plan provides credit for full years only, and leftover money “must be returned to the Group B member or, if the Group B member has died, to the Group B member’s designee, without any accrued interest on the returned money”. The plan also has the system accept an eligible rollover distribution from another plan as payment for past service credit. See the pension buyback calculator for the general method.
Cost-of-living adjustments
The plan promises no fixed increase. It says “annually on the first day of October, the pension system may increase the base pension of a benefit described by Subsection (a) of this section by a percentage equal to the average annual rate of actual investment return of the pension system for the five-year period ending on the December 31 preceding the effective date of the adjustment less five percent”. The limits: “An adjustment under this section may not be less than zero percent or exceed four percent of the applicable base pension benefit”. And the system may adjust only if the ratio of market value of assets to actuarial accrued liabilities, after the adjustment, “is not less than .70”.
A pensioner waits for the first October 1 after retirement and the earlier of two dates: “the date the pensioner reaches 62 years of age” or “the third anniversary of the date the pensioner retired”. Members on active service, including DROP participants, get none.
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 DPFP’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”. The plan text itself provides for a direct transfer of an eligible rollover distribution to another eligible retirement plan, the direct rollover route the IRS page describes as the alternative to withholding. A computed example from an assumed $10,000 taxable refund paid directly to a member, not a DPFP figure: 20% withholding would be a computed $2,000, leaving a computed $8,000 in cash, and a rollover of the full $10,000 would need the withheld $2,000 from other money. See 20 percent withholding on a pension lump sum. 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 give the actuarial reduction factors for the joint and survivor options, so the size of the reduction for a given age gap is not stated.
- The pages read do not show any alternative early retirement multipliers the board may have adopted, so the early retirement example uses only the stated two-thirds of one percent per month.
- The pages read do not describe how spousal consent works for a married member who wants to skip a survivor option, or whether any consent form exists.
- The pages read give no DROP annuitization factors and no interest rate for DROP balances credited before September 1, 2017.
- The plan document is a legal text dated by its file name, not a member handbook, and amendments after the version read on October 7, 2026 would not appear in it.
Common mistakes
- Electing a joint and survivor option and expecting the pension to rise if the spouse dies first; the plan says the reduced benefit will not be increased.
- Taking a refund of contributions and assuming the service can be restored on the same terms later; a refund cancels pension service credit, and repayment carries interest.
- Joining DROP while still counting on a refund; the DROP election ends eligibility for any refund of contributions.
- Missing the three year refund window that starts from the board’s notice; the plan says the right to withdraw is forfeited.
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
- Dallas Police and Fire Pension System, Plan document (Art. 6243a-1, file DPFPPlan9.01.23.pdf): https://www.dpfp.org/Resources/6a3987c2-bc98-4269-8b21-b3478551374e/DPFPPlan9.01.23.pdf
- 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.