Updated October 8, 2026. Quick answer: A member of the Houston Firefighters’ Relief and Retirement Fund hired before July 1, 2017 can take a service pension on reaching 20 years of service at any age. The pages read describe no menu of joint-and-survivor options: survivor shares come from the statute. The big election is the Deferred Retirement Option Plan (DROP), up to 15 years and irrevocable once the Pension Benefits Committee acts. A DROP check carries at least 20% federal withholding unless rolled over directly. Leaving with under 10 years pays only a refund of contributions without interest.
What this page covers and which members it fits
This page works from documents published by the Houston Firefighters’ Relief and Retirement Fund (HFRRF): its 2026 Summary Plan Description, which reproduces the Fund’s pension policies and the plan’s governing statute, and member handouts, all read on October 8, 2026. Any figure here is the Fund’s, or is labeled as a computed example from assumed inputs.
The plan has two groups, split by hire date. The Fund’s mid-career handout says “The following information only applies to members hired before July 1, 2017”, and the Plan Summary gives separate rules for firefighters hired on or after that date. Both are covered below. The Summary warns that “In case of any conflict between this summary, the Statute, and the policies and procedures, the Statute and policies and procedures will prevail”. Members pay into the plan: “you contribute, through biweekly payroll deductions, 10.5% of your total gross pay to the Fund”. State tax questions are on Texas retirement taxes and does Texas tax pensions.
When a service pension can start and what it pays
For firefighters hired before July 1, 2017, a service pension is available when the member “has attained 20 years of service”. The Fund’s handout adds that “If hired prior to July 1, 2017, members could retire with 20 years of service regardless of age”. Average monthly salary (AMS) for this group is based on the “highest 78 pay periods”, with overtime counted only for pay periods before July 1, 2017.
For firefighters hired on or after July 1, 2017, the Summary requires “20 years of pension service”. Their AMS is based on “last 78 pay periods with no overtime included”, and the statute says the pension “may not exceed 80 percent of the member’s average monthly salary”.
| Member group | Years of service | Annual accrual rate (share of AMS) | Benefit percentage cap |
|---|---|---|---|
| Hired before July 1, 2017 | Years 1 to 20, worked before 7/1/2017 | 2.5% | None |
| Hired before July 1, 2017 | Years after 20, worked before 7/1/2017 | 3% | None |
| Hired before July 1, 2017 | Years 1 to 20, worked on or after 7/1/2017 | 2.75% | None |
| Hired before July 1, 2017 | Years after 20, worked on or after 7/1/2017 | 2.00% | None |
| Hired on or after July 1, 2017 | Years 1 to 20 | 2.25% | 80% |
| Hired on or after July 1, 2017 | Years after 20 | 2.00% | 80% |
A computed example from assumed figures, not HFRRF figures: a pre-2017 hire with 20 years, all worked before July 1, 2017, earns 20 years at 2.5%, a computed 50.0% of AMS. On an assumed AMS of $6,000 a month that is a computed $3,000 a month. A post-2017 hire with 22 years earns 20 years at 2.25% plus 2 years at 2.00%, a computed 49.00% of AMS, or a computed $2,940 a month on the same assumed $6,000.
The election: one pension, a statutory survivor benefit, and one-time waivers
The documents read do not describe a menu of payment options at retirement, such as a reduced pension that continues to a spouse. The statute sets survivor benefits by rule instead. The Summary says “If you die after retirement your eligible survivor(s) will receive a survivor benefit equal to the benefit you were receiving at the time of your death”. Under the statute, a spouse with no eligible child gets a benefit that “is equal to the full amount the member would have been entitled to receive”, and where a child also survives the spouse receives “one-half of the amount the member would have been entitled to receive”. For the general framework on survivor choices elsewhere, see single-life vs joint-and-survivor pension.
The statute does contain one-time waivers for a person receiving benefits, who may “make a one-time election to receive a smaller pension or survivor benefit than is otherwise provided under this article” or “make a one-time election not to receive any future annual increases in the pension or survivor benefits”. Each is final: “On the date the board grants approval of an election under Subsection (i) of this section, the election becomes irrevocable”.
| Path | What the member receives | What a survivor receives |
|---|---|---|
| Service pension, no DROP | A monthly pension for life at the accrual rates above | One-half to a spouse where children also survive, otherwise the full amount |
| Service pension after DROP | The pension locked in at DROP entry, plus the DROP account balance | The DROP balance goes to the eligible spouse, children, parents or a beneficiary |
| Refund (10 to under 20 years) | A lump sum of contributions, with 5% simple interest on those made before July 1, 2017 | No monthly survivor benefit from the refund itself |
| Deferred pension (10 to under 20 years) | 1.7% of AMS per year of participation, from age 50 | Survivors can receive the benefit from the date the member would have been 50 |
A spouse acquired after leaving active service is treated differently: “If the retiree dies before five years of marriage, the monthly pension benefit would be 20% for each year of marriage”.
What is irrevocable, and the deadlines
The DROP election cannot be undone once approved: “An election to participate in the DROP, once approved by the board, is irrevocable”. Before approval a member can still back out: “You can withdraw your DROP application at any time prior to its approval by the Pension Benefits Committee”. The Fund requires counseling first. The Summary says members are “required to attend a personal pre-retirement counseling meeting with the Fund”, and for the DROP the Fund’s memo to members sets two dates: a counseling session “no later than 45 days before the effective date of his or her DROP participation” and an application “at least 30 days in advance of his or her DROP effective date”.
The DROP: what it is and what it replaces
The Summary describes the DROP this way: “The DROP enables a firefighter to accumulate a separate sum of money toward retirement while still working as an active employee”. Eligibility starts at 20 years: “Firefighters that are members of the Fund have the option of entering the Deferred Retirement Option Plan (DROP) once they reach 20 years of participation”.
Entering the DROP is also a choice of payment form. The application has the member verify that they understand they are electing a distribution “in a form other than a life annuity”. There is a time limit: “Effective September 1, 2025 you can participate in the DROP for up to 15 years”. The account earns “65% of the previous 5 fiscal years compounded average”, and “The annual rate will not be less than 2.5% and there is no maximum”. On contributions: “As of July 1, 2017, member contributions are no longer credited to the DROP account”.
The pension is frozen at entry, and cost-of-living increases pause: “As of July 1, 2017, active DROP participants are not eligible for a COLA”. For members who qualify, the pension itself grows after the DROP. The Summary says “their monthly benefit at actual retirement would be increased by 2% for every full year of DROP participation for the first 10 years, for a maximum of 20%”. The statute adds that the increase “is applied to the member’s benefit at retirement and is not added to the member’s DROP account”.
A computed example from assumed figures, not HFRRF figures: assume a $4,000 monthly benefit at DROP entry and 5 years in the DROP, which is 60 months. The account is credited 60 times $4,000, a computed $240,000, before earnings. For a member with at least 20 years of participation on July 1, 2017, the pension rises 2% for each of 5 full years, a computed 10%, which is a computed $400 on the $4,000 original benefit, for a computed $4,400 a month at retirement.
Taking the DROP money: check, rollover, or leave it with the Fund
At retirement the Summary lists the routes. One is a check: “A check for the entire amount (less applicable withholding) will be made payable to you”. Another is that “The contents of your account will be transferred, in whole or in part, by the Pension Fund to an Individual Retirement Account (IRA) in your name”. A third is to leave it: “If you choose to leave your money in the Fund, you can make four withdrawals at any time during the calendar year (January to December) and/or set up either quarterly or monthly recurring payments”.
Tax is the cost of the check route. The Summary says “the Fund must take a minimum of 20% federal income tax out of the distribution”. For the rollover and leave-with-Fund routes, “If you authorize the Fund to roll over your DROP proceeds directly to an IRA or another qualified retirement plan, or if you choose to leave your assets with the Fund, there are no immediate tax consequences”. On a check, “the distribution will be treated as ordinary income to you in the year you receive it”. The Summary adds that an early distribution tax can apply to a person who is not at least age 50 by the end of the year of leaving active service, or who withdraws from a rollover account before age 59½.
A computed example from an assumed $100,000 DROP check paid to the member, not an HFRRF figure: 20% of $100,000 is a computed $20,000 withheld for federal tax, leaving a computed $80,000 in cash. A direct rollover avoids the withholding, and the Fund’s policy lets a member elect “to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan”. See 20 percent withholding on a pension lump sum and pension lump sum vs monthly annuity.
Back-DROP: moving the entry date earlier
The Fund’s handout says “Back-DROP is a provision of DROP that allows a participant to change their DROP entry to an earlier date”. The limits: “The minimum Back-DROP period is one month and the maximum is 3 years, but the effective Back-DROP date must be on the first of a month”. The handout warns: “Once you retire, it’s too late to Back-DROP”. The pages read do not give a dollar example of what a Back-DROP adds.
If a DROP member dies
With a spouse and no children, “your entire DROP account balance is paid to the eligible spouse or the eligible spouse may elect to keep the balance in the Fund”. With both, “one-half of your DROP account balance is paid to the eligible spouse” and the rest goes to the children. A spouse acquired after DROP entry gets a share tied to time: “a reduced portion of your DROP account, based on the percentage of time this spouse was married to you”.
Leaving before 20 years: refund or deferred pension
With under 10 years of service: “All members that terminate service with the Houston Fire Department with less than 10 years of service are entitled to receive a refund of their employee contributions without interest”. The statute adds that such a member “is not entitled to a deferred pension benefit under this section or to any other benefit under this article”.
A member with at least 10 but under 20 years may choose. The Fund’s handout lists the refund as “Member contributions made before July 1, 2017 with 5% simple interest” and “Member contributions made on or after July 1, 2017 without interest”. The deferred option: “Your deferred benefit will begin at age 50, and you will receive 1.7% of your average monthly salary for each year of participation”. The handout notes “Deferred Pension option closed to members hired on or after July 1, 2017”. “If you elect a refund of contributions, you may request that the Fund issue the payment as a direct rollover”. A member who returns later keeps credit only if “you return to the department within five years and begin paying into the Fund”. A member who took a refund must also repay it: the Fund’s re-entry policy requires “the repayment of the member’s total refunded contribution, plus interest, prior to such re-entry into the Fund”, with interest at “the actuarially assumed rate for return on investment plus two (2) percent”, “compounded annually”, paid within “one-hundred and twenty (120) calendar days” of applying to re-enter. Without repayment, participation “shall be counted from the re-entry date” and the refunded years are disregarded. A firefighter who moves directly from another Texas city’s fire department with a similar fund may receive prior service credit if under 36 years of age, if the firefighter passes a physical examination and applies not later than the 60th day after membership begins, and if the firefighter pays an amount equal to the total contribution that would have been made at the municipality’s pay scale, plus six percent interest, compounded annually (Statute Sec. 16). The pages read give no price for any other kind of service purchase. See public pension retirement decisions for the general trade-off.
Cost-of-living adjustments and the supplemental payment
The statute’s main COLA rule covers benefits for a member who has left active service and is or would have been “at least 55 years old”, with separate wording for on-duty disability and on-duty death cases. The benefit “shall be increased in October of each year by a percentage rate equal to the most recent five fiscal years’ smoothed return, as determined by the fund actuary, minus 475 basis points”. A floor and a cap apply: it “may not be less than zero percent or more than four percent, irrespective of the return rate of the fund’s investment portfolio”. A DROP participant receives no increase in any October of DROP participation.
A computed example from assumed figures, not HFRRF figures: if the five-year smoothed return were 7.5%, subtracting 475 basis points (4.75 percentage points) gives a computed 2.75%, within the zero to four percent range. On an assumed $5,000 monthly benefit that adds a computed $137.50 a month. The actuary’s actual return decides each year.
Separately: “A supplemental benefit payment will be issued to eligible retirees and survivors (see Section 10A of the Statute) each January”.
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 HFRRF’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 own DROP notes describe the same withholding and the rollover alternative. 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
Three differences appear in the Fund’s own documents. On when a post-2017 hire may retire, the handout “Not Ready to Retire?” says “you will qualify for service retirement when you meet the Rule of 70” (age plus years of service of 70 or more), while the statute provides a service pension to that group “at the age at which the member attains 20 years of service”, and the Summary speaks of 20 years of pension service. On the DROP, the same handout says “SB2190 discontinued the Deferred Retirement Option Plan (DROP) for members hired after July 1, 2017”, while the Summary describes the DROP without that exclusion. The mid-career handout says “Deferred Pension option closed to members hired on or after July 1, 2017”, a limit the Summary and statute text read do not repeat. A member hired on or after July 1, 2017 should get the rule in writing from the Fund.
What this page could not settle
- The pages read do not describe a joint-and-survivor or single-life option election at retirement, other than the statute’s one-time waivers.
- The pages read do not state a spousal consent requirement for a DROP distribution, a refund or a rollover.
- The pages read price service credit only for repaying a refund on re-entry (Policy 8.03: the actuarially assumed return plus 2%, compounded annually); the only other priced purchase is prior service credit from a similar Texas fire fund, at the contributions that would have been made plus six percent interest, compounded annually (Statute Sec. 16); they give no price or formula for any other service purchase.
- The pages read do not settle whether the Rule of 70 or 20 years of service controls a post-2017 hire, or whether such a hire can use the DROP or the deferred pension.
- The pages read do not give the DROP earnings rate or the smoothed return used for the COLA for any year.
- The Special Tax Notice, the DROP application, the distribution forms, the Post Retirement Option Plan and the disability rules were not worked through.
Common mistakes
- Treating the DROP as reversible; the Fund says the decision is irrevocable once the Pension Benefits Committee acts.
- Missing the DROP timing; the Fund’s memo requires a counseling session at least 45 days before entry and an application at least 30 days before it.
- Expecting a COLA during DROP years; the statute says no increase is paid for an October during DROP participation.
- Taking a DROP check expecting the full balance; at least 20% federal tax is withheld unless the money goes by direct rollover.
- Assuming a hire date after July 1, 2017 follows the pre-2017 rules; the accrual rates and cap differ, and the Fund’s handouts limit DROP and deferred pension access.
Related on this site: public pension retirement decisions, Texas retirement taxes, does Texas tax pensions, single-life vs joint-and-survivor pension, pension lump sum vs monthly annuity and 20 percent withholding on a pension lump sum.
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Answer againSources
- Houston Firefighters’ Relief and Retirement Fund, Summary Plan Description 2026 (Plan Summary, Pension Benefits Policies and Procedures, and Art. 6243e.2(1) statute text, as printed): https://www.hfrrf.org/Resources/f27fa8a8-30db-42c0-bc51-2b51662c60d8/Plan%20Summary.pdf
- Houston Firefighters’ Relief and Retirement Fund, Mid-Career Retirement Options (member handout, members hired before July 1, 2017): https://www.hfrrf.org/Resources/5ada6d2b-8867-475b-9a21-ba0a4a76f153/Retirement%20Options.pdf
- Houston Firefighters’ Relief and Retirement Fund, Back-DROP (member handout, members hired before July 1, 2017): https://www.hfrrf.org/Resources/b04ca3b3-5e91-455a-9749-a658334373bd/Back-DROP.pdf
- Houston Firefighters’ Relief and Retirement Fund, Not Ready to Retire? (member handout): https://www.hfrrf.org/Resources/b2ca2185-58cc-4dc4-9c88-2881694dec32/Not%20Ready%20to%20Retire.pdf
- Houston Firefighters’ Relief and Retirement Fund, DROP deadlines memo to members (dated August 20, 2024, 2025 DROP Calendar): https://www.hfrrf.org/Resources/543f2d1b-54a4-4e87-a8e4-fc8e5fbad2ed/DROP%20Calendar.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 8, 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.