Dallas city hall and the board that represents police and firefighters reached a settlement that ends a long‑running lawsuit over how the city will fund a pension system short by $3 billion. The agreement, approved by a narrow 6‑5 vote, marks the end of a legal battle that began in August 2024 and has drawn mixed reactions from first‑responder communities.
The Legal Battle
The Dallas Police and Fire Pension (DPFP) Board of Trustees filed a lawsuit in August 2024, challenging the city’s pace and amount of “actuarially determined contribution” (ADC) payments required by state law. The lawsuit stemmed from disagreements over how quickly the city would make ADC levels to shore up the pension fund, which faces a $3 billion shortfall.
Settlement Details
On November 13, the DPFP board voted the same 6‑5 split to accept a settlement offer from the city that includes $220 million in payment to the pension fund in 2026. The offer also clarifies the timing of future ADC contributions and outlines a plan to fully fund the retirement investment plan for first responders by 2055, as mandated by a 2017 state law.
The 6‑5 Vote
The settlement was approved Thursday by six votes, all of which were cast by trustees appointed by Mayor Eric Johnson. The five dissenting votes were taken by elected board members, including Board President Michael Taglienti, a 22‑year officer with the Dallas Police Department.
Taglienti’s Concerns
Taglienti said the board may not have followed its fiduciary responsibility to act in the best interest of active and retired police officers and firefighters. He added, “That’s frustrating, but that’s the way the city wants it, and that’s the way [the] board ending up voting today ultimately,” Taglienti said.
Mayor Johnson’s Statement
Mayor Johnson framed the vote as a fulfillment of a promise made to public‑safety workers. He said, “This plan ensures that today’s retirees are secure, that our current officers can look forward to a stable future, and that Dallas can continue attracting the best men and women to serve in our public safety departments,” Johnson said in a statement.
Impact on Retirees
The settlement provides a concrete $220 million contribution that will help close the pension gap and secure benefits for retirees who have served the city. The additional funding is part of a broader strategy to meet the 2055 fully‑funded target set by state law.
Impact on Current Officers
Current officers will benefit from a more predictable funding schedule, which is intended to stabilize the pension system and reduce uncertainty about future benefits. The agreement also signals the city’s commitment to maintaining a competitive compensation package to attract and retain top talent.
Funding Timeline
The city is required to create a plan by 2024 that will have the retirement investment plan fully funded by 2055. The settlement clarifies that $220 million will be paid in 2026, with subsequent ADC payments scheduled to meet the 2055 target.
Context of the Shortfall
The pension fund’s $3 billion shortfall has been a long‑standing concern for Dallas public‑safety employees. The legal dispute highlighted the challenges of balancing city budgets with long‑term pension obligations.
Legal History
The lawsuit began in August 2024 and was the first major legal action taken by the DPFP board against the city. The board’s decision to settle reflects both the legal pressure and the need for a swift resolution.
Reactions from First Responders
While the settlement resolves the legal dispute, some first responders view the vote as a setback. They argue that the settlement may not fully address the underlying funding gaps and that the city’s contribution pace remains a concern.
Key Takeaways
- Dallas city hall and the DPFP board settled a lawsuit over a $3 billion pension shortfall.
- The settlement includes $220 million to be paid in 2026 and clarifies future ADC contributions.
- The 6‑5 vote was split between mayoral appointees and elected trustees, with dissent from Board President Michael Taglienti.
The settlement marks a significant step toward stabilizing Dallas’s police and fire pension system, though debates about the pace and adequacy of city contributions continue among first‑responder advocates.
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