Updated October 7, 2026. Quick answer: A general employee of the City of Fort Worth in the Fort Worth Employees’ Retirement Fund (Tier I hired before July 1, 2011, Tier II on or after) draws a formula pension, can take 5% to 25% of its actuarial value as a lump sum with a smaller monthly pension, or can enter DROP for up to 72 months. The survivor election at retirement is one-time and irrevocable. Leaving earlier, a refund returns employee contributions plus interest, not the City’s, and forfeits retirement, disability and survivor eligibility. Tier II has no cost-of-living increase.
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.
What this page covers and what it does not
This page works from documents published by the Fort Worth Employees’ Retirement Fund (FWERF): its Tier II and Tier I member handbooks, its Application for Withdrawal of Contributions, and four pages of its website, read on October 7, 2026. Any figure here is FWERF’s, or is labeled as a computed example from assumed inputs.
The group covered is the general City of Fort Worth employee. The site sorts general employees by hire date: “Hired before July 1, 2011: Tier I.” and “Hired on or after July 1, 2011: Tier II.” Civil service police officers and firefighters have their own tier dates and are not covered. A rehire can change the tier: “If you leave the City and then are rehired, it may impact your Tier level”, and the Tier II handbook says “If you terminated and withdrew your contributions, regardless of vesting status, you became a Tier II member upon your rehire”. Neighboring systems are on Dallas Employees’ Retirement Fund decisions and Dallas Police and Fire Pension decisions; state tax is on Texas retirement taxes.
How the pension is built
The pension is a formula, not a balance: “Your pension benefit is based on a formula, NOT on your contributions.” “There are three service colors: Blue, Orange, and Gray.” Orange and Gray service use “Average of highest five years of wages X years of service X Benefit Multiplier 2.5%”, and Blue service (Tier I service from the hire date through September 30, 2013 for general employees; service after that date is Orange) uses “Average of highest three years of wages X years of service X Benefit Multiplier 3%”. The vesting rule: “You will be eligible to receive a pension if you have at least five years of eligibility service, at which time you will be vested in the Fund.”
A computed example from assumed figures, not an FWERF figure: an assumed final average pay of $60,000 times an assumed 20 years of service times the 2.5% multiplier is a computed $30,000 a year, or a computed $2,500 a month before taxes and deductions.
When a pension can start and how to apply
Normal retirement is the earlier of two tests: “Years of eligibility service and years of age equal 80”, or “Attain age 65 with a minimum of five years of service”. Early retirement carries a penalty: the Tier II handbook says “If you are at least 55 years of age and have completed five or more years of service, you may take an Early Retirement and receive a reduced pension benefit”, and the website describes “a member who leaves early is subject to an early retirement penalty of 5/12% for every month they leave early (or 5% annually) based on their normal eligibility date”.
A computed example from assumed figures, not an FWERF figure: retiring an assumed 24 months before the normal date applies 24 times 5/12 of 1%, a computed 10% reduction, which on an assumed $2,500 monthly pension is a computed $250 a month. This leaves out the lower early multiplier the handbook also applies, so the Fund’s own estimate controls.
Filing has a deadline and an approval step: “All applications must be received by the 10th of the month in order to go in effect the first of the following month.”
The election: what each choice pays and what it does to a survivor
| Choice | What the member receives | What a survivor receives |
|---|---|---|
| Formula pension, Tier I member married at least one year before retirement | The monthly pension from the formula | Spouse receives 75% of the monthly pension for life |
| Designated beneficiary reduction (Tier II members, and unmarried Tier I members) | A pension reduced by actuarial factors, based on the designee’s age | One person receives 25%, 50%, 75% or 100% of the reduced pension for life; irrevocable |
| Marriage after retirement election (no designated beneficiary elected) | A reduced pension, with a Pop-up or a Non Pop-up version | Spouse benefit; 75% on the website, 25%, 50%, 75% or 100% in the Tier II handbook |
| Actuarial equivalent lump sum | A lump sum for 5% to 25% of the actuarial value, plus a reduced pension | Not stated in the pages read |
| DROP (Deferred Retirement Option Program) | Pension credited to a DROP account while the member keeps working, up to 72 months | Not stated in the pages read |
| Refund of contributions, if the member leaves | Employee contributions plus interest, not the City’s contributions | Retirement, disability and survivor eligibility are forfeited |
The survivor election and what is irrevocable
For a married Tier I member, the Tier I handbook says “your surviving spouse will receive 75% of your monthly pension for the rest of his/her life, provided that you were married at least one year prior to your retirement”. For a Tier II member, or a Tier I member who is unmarried, the website says “If you are a Tier II member or a Tier I member who is unmarried, at the time of retirement, you may elect to provide a survivor benefit for one person at 25%, 50%, 75% or 100% of your benefit”. “The age of the designated person is a factor in the calculation of the benefit.” “This is a one-time, irrevocable election approved by the Board of Trustees.” If payments to the member and survivors stop before they equal the member’s contributions and interest, the handbook says the excess “will be paid to your beneficiary listed on your Beneficiary Election for Death Benefit Form, or if you do not have a beneficiary elected, to your estate”. See also single-life versus joint-and-survivor pension.
A computed example from an assumed $2,400 reduced monthly pension, not an FWERF figure: at 50% the designee receives a computed $1,200 a month, at 75% a computed $1,800, and at 100% a computed $2,400. The $2,400 is an assumed input, since the pages read do not print the actuarial factors.
A member who retires unmarried and marries later has a window: “After completing two years of marriage you will have a 6 month period in which you will need to complete a form and elect to add the survivor benefit for your spouse and reduce your benefit”. The Tier I handbook states the cost of missing it: “If you do not make such an election, your surviving spouse will not receive a pension upon your death.” The website offers a Pop-up or a Non Pop-up version of the reduced pension: “Under the Pop-up option, the Member’s pension will be reduced more than under the Non Pop-up Option”.
Partial lump sum: the actuarial equivalent election
At normal or special retirement a member may elect “between 5% and 25% of the actuarial value of your retirement benefit in a one-time lump sum payment and a reduced monthly benefit”. “The lump sum benefit is paid the same date the first monthly retirement benefit is made.” In the handbook’s example, “Mr. Carter could elect to take a reduction of his monthly pension to be between $1,500.00 (25%) and $1,900.00 (5%) per month”. On cost-of-living increases, “Any applicable COLA would be on the unreduced base pension ($2,000.00)”. For the 5% election it prints a lump sum of $13,101.20 at age 55, “provided Mr. Carter was not married”.
A computed example from the handbook’s figures: the reduction is $100 a month. The age 55 lump sum of $13,101.20 divided by $100 is a computed 131.0 months, about 10.9 years of the reduced pension. This ignores any COLA, interest the lump sum could earn and how long the retiree lives. The general framework is on pension lump sum versus monthly annuity break-even. The Fund’s tax FAQ says a 1099-R reports “an actuarial lump sum distribution, or a DROP payment”.
DROP: working while the pension accrues
A member who has reached the normal or special retirement date may stay on the job. “Upon your election to enter the DROP, your benefit service credit and FAC are frozen.” “Funds in a DROP account do not accrue gains or losses.” “A member may not accrue more than 72 months in DROP.”
The balance can be taken three ways: “Immediately receive a lump sum payment of the entire DROP account balance”; “Receive the entire DROP account balance in five equal, annual installments”; or “Have the entire DROP account balance converted into an annuity and added to your pension”. “Depending on your particular situation, the option you select may have tax consequences.”
A computed example from assumed figures, not an FWERF figure: an assumed $3,000 monthly pension credited for an assumed 36 months, with no gains or losses, builds a computed $108,000 DROP balance before any tax, against a pension whose service and final average compensation stopped growing at the election.
Leaving before retirement: refund or leave the money in
“If you leave the city before you have completed the five years of service needed to become vested, you are entitled to receive a refund of your employee contributions plus interest.” For a vested member the handbook lists three paths: “Receive a refund of your employee contributions, with interest”; “Leave your contributions in the Fund and, when you are eligible, submit an application for Early Term Vested Retirement”; or “Leave your contributions in the Fund and, when you are eligible, submit an application for Normal Term Vested Retirement”. The website says the pension can start “in a reduced amount commencing on or after age fifty (50) for Tier I members or fifty-five (55) for Tier II Members”. The Tier II handbook gives a different age, covered below. More is on pension refund versus leaving it.
Taking the refund: what it ends
“If you terminate employment with the city at any time, you are entitled to receive a refund of your employee contributions plus interest.” “Employer contributions made by the City of Fort Worth are non-refundable.” “If you receive a refund, you will forfeit any eligibility you may have for retirement, disability or survivor benefits.”
Interest has conditions: “Interest stops accruing at your termination date.” The member must be an active employee “on the last day of the last pay period of the calendar year to earn interest on contributions”. On timing, “it takes 60 to 90 days upon receipt of your Application of Withdrawal to process your refund”.
How a refund is paid, rolled over and withheld
The form says “If you do not elect to transfer the interest portion and pre-tax contribution, federal law requires the Fund to withhold 20% of such amount”. “There will be no withholding on the return of the non-deductible (post-tax) contributions you made to the Fund.” To roll over, “I must furnish the Fund with a Letter of Acceptance from the rollover institution”. “The non-taxable portion will be paid directly to you.”
A computed example from an assumed $10,000 taxable refund paid to the member, not an FWERF figure: 20% of $10,000 is a computed $2,000 withheld, leaving a computed $8,000 in cash. The final tax can be more or less than the withholding. See 20% withholding on a pension lump sum.
Buying service credit and repaying a refund
On price, the handbook says “The cost to purchase service credit for each individual is based on many factors”, so only the Fund can quote it. For non-qualified service, “This type of service purchase is available to any vested member and is limited to five years of service”. “Payment for a service purchase must be made all at one time.” “Only Gray service may be purchased after July 19, 2019.”
Someone who took a refund and is rehired has a narrow window. The handbook says “your prior service can only be restored if you repay the total amount of all contributions withdrawn plus interest”. Employees who are rehired “have 90 days from the date of rehire to contact the Retirement Fund regarding the repayment of withdrawn contributions to restore prior service”. A payroll plan is allowed, and “interest will be charged through the payback period, which will not exceed three years”. “The interest on a buy back will be at the assumed rate of return in effect at the start of any buy back.” A rehired member who misses the window “will waive his or her right to prior service”.
Cost-of-living adjustments
“Currently, there are no COLA increases for Tier II members.” For Tier I, the website says “The Orange portion of your benefit is eligible for a 2% simple COLA each January, again provided that you retired by Sept. 30 of the preceding year”. For retirements after January 1, 2021, “Blue and Orange portions of your benefit will be eligible for a variable COLA set by the Fund board and City Council”, and “No COLA will be paid on the Gray portion of your benefit”.
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 FWERF’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 Fund’s refund form describes a rollover on the same basis, with 20% withholding on the taxable portion unless it is transferred. The handbook says to seek tax advice before picking a DROP payout. 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.
Where the sources disagree
Early retirement age: the Tier II handbook says “If you are at least 55 years of age and have completed five or more years of service, you may take an Early Retirement and receive a reduced pension benefit”, while the website’s retirement types page says “A member who is at least fifty (50) years of age with five (5) or more years of service may take an early retirement and receive a reduced pension”. For a vested member who has left, the website gives age fifty (50) for Tier I and fifty-five (55) for Tier II, but the Tier II handbook says “You may elect to commence payments in any month following your 50th birthday”.
Marriage after retirement: the website and the Tier I handbook give a 75% spouse benefit, and the Tier II handbook says “If you make this election, you may choose for your spouse to receive 25, 50, 75 or 100% of your reduced pension upon your death”.
DROP table: the Tier II handbook prints “$2,100.00 x 48 = $118,616.16”, but $2,100.00 times 48 is a computed $100,800, and its 60 month line prints $100,800.00 where $2,100.00 times 60 is a computed $126,000. Confirm any DROP balance with the Fund.
What this page could not settle
- The pages read do not print the actuarial factors, so the size of the reduction for any survivor election is not stated.
- The pages read do not state how an actuarial lump sum is taxed or whether it can be rolled over; the refund form describes a rollover for a refund only.
- The pages read do not state what a survivor receives when a member elects the lump sum or DROP.
- The Administrative Rules and the City ordinance, which the handbook says prevail over its summary, were not read.
- The pages read do not give a price for a service purchase, or the interest rate credited in recent years.
- Civil service police and fire, disability retirement and retiree health insurance (handled by the City) were not worked through.
Common mistakes
- Treating the survivor election as changeable; the handbook calls the designated beneficiary reduction one-time and irrevocable.
- Assuming the 75% spouse benefit that the Tier I handbook describes for a married member also applies to Tier II after retirement; the Tier II pages read describe the designated beneficiary election.
- Taking a refund without weighing what ends; retirement, disability and survivor eligibility are forfeited and employer contributions are not returned.
- Rehiring after a refund without repaying within 90 days; prior service is restored only by repaying the contributions plus interest.
- Expecting a refund check in full; 20% of the taxable portion is withheld unless it is transferred.
Related on this site: Texas retirement taxes, does Texas tax pensions, pension refund versus leaving it, single-life versus joint-and-survivor pension, pension buyback calculator, 20% withholding on a pension lump sum, pension lump sum versus monthly annuity break-even, Dallas Employees’ Retirement Fund decisions, Dallas Police and Fire Pension decisions and public pension retirement decisions by system.
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Answer againSources
- Fort Worth Employees’ Retirement Fund, Tier II Member Handbook and Pension Benefits Summary (2023 Tier II Member Handbook, general employees, civil service police and fire): https://www.fwretirement.org/document_center/Benefits/Tier_2_2026_Member_Handbook.pdf
- Fort Worth Employees’ Retirement Fund, Tier I Member Handbook and Pension Benefits Summary (2023 Member Handbook, updated January 2023): https://www.fwretirement.org/document_center/Benefits/Tier_1_Member_Handbook_2023.pdf
- Fort Worth Employees’ Retirement Fund, Application for Withdrawal of Contributions (Plus Interest) (revised 04/2021): https://cms1files.revize.com/fortworthretirement/document_center/Forms/EmployeeForms/Refund_Application_2021_fillable.pdf
- Fort Worth Employees’ Retirement Fund, Active Member Benefits (web page, read October 7, 2026): https://www.fwretirement.org/benefits/active_member_benefits/index.php
- Fort Worth Employees’ Retirement Fund, Retirement Types and Options (web page, read October 7, 2026): https://www.fwretirement.org/benefits/retirement_types_and_options.php
- Fort Worth Employees’ Retirement Fund, Term Vested Members, Separated Member Benefits (web page, read October 7, 2026): https://www.fwretirement.org/benefits/seperated_member_benefits/index.php
- Fort Worth Employees’ Retirement Fund, Payments and Deduction FAQs (web page, read October 7, 2026): https://www.fwretirement.org/benefits/faqs/payment_taxes_and_deduction_questionsFAQ.php
- Fort Worth Employees’ Retirement Fund, Tax Form FAQs (web page, read October 7, 2026): https://www.fwretirement.org/benefits/faqs/tax_form_faqs.php
- 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.