The fund that pays pensions to Dallas' civilian city workers spends a larger share of its assets on administrative and investment costs than any of ten peer systems reviewed, and its leadership pay and board practices warrant further review, according to a review by the city auditor's office that goes before a City Council committee Monday.
The July 17 memo was compiled by the Office of the City Auditor at the request of Finance Committee members and is attached to the committee's Oct. 26 agenda. Its pages are stamped confidential.
It says plainly that the work was not an audit or investigation and offers no assurance; it is meant to help council members decide whether to ask more questions or seek an independent review.
The Employees' Retirement Fund will get its own turn the same afternoon. The fund's executive director and chief investment officer are listed to brief the committee on the fund's governance, strategy and fiscal outlook. That presentation had not been posted as of Wednesday.
Costs
The fund managed about $3.97 billion in investments at the end of 2025. Its proposed 2026-27 budget is about $26.4 million, with recurring costs up 4.3%. According to the memo, about $13.8 million goes to outside investment managers and about $11.7 million to administration, $8.25 million of that for salaries and related pay.
An outside firm, RSM US LLP, put the fund's expenses at 0.82% of assets, the highest of the ten peer systems it compared. Phoenix was next at 0.59%. RSM's ten-year comparison also found the Dallas fund's net returns below most of the peers, although the fund reported about 11.7% for its latest period.
