Dallas Police and Fire Pension and a Gold IRA

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Short on time? The essentials

• Your monthly DPFP retirement benefit is a lifetime annuity and is not eligible for rollover. Only lump-sum cash from a DROP account or a refund of member contributions can move to a gold IRA.
• DPFP is a single system with two coordinated plans: the Combined Pension Plan and the Supplemental Plan. The Supplemental Plan, created in 1973, covers ranks above the highest corresponding civil service rank.
• DPFP is governed by Vernon's Texas Civil Statutes Article 6243a-1. That statute was rewritten by HB 3158, passed by the 85th Texas Legislature in 2017, signed by Governor Abbott on May 31, 2017, and effective September 1, 2017.
• HB 3158 rewrote DROP rules, contribution rates, benefit accrual, and the retirement age framework. Members hired before and after September 1, 2017 sit under different rules. Confirm current numbers with DPFP before filing.
• Under IRC Section 3405, a payment made to the retiree is subject to 20 percent mandatory federal withholding. A direct rollover to the receiving custodian avoids the withholding and the 60-day redeposit clock.
• Inside the self-directed IRA, cash buys IRS-approved bullion or coins meeting IRC 408(m)(3) fineness. Gold minimum purity is 99.5 percent; silver 99.9 percent; platinum and palladium 99.95 percent. The American Gold Eagle qualifies at 91.67 percent by statute.
• Texas has no state personal income tax under Article 8, Section 24 of the Texas Constitution. The state-run Texas Bullion Depository accepts IRA storage through Lone Star Tangible Assets, which received IRS approval as a nonbank trustee in 2023.
• Home storage of IRA metal is not allowed. The 2021 Tax Court ruling in McNulty v. Commissioner treats it as a full distribution.

See the Augusta Precious Metals gold IRA company checklistAugusta is our primary affiliate partner. The free checklist gives you a clean way to vet any provider you call about a DPFP DROP or refund rollover.Print / save as PDF

On this page

• DPFP structure: one system, two plans
• Combined Pension Plan mechanics that matter for a rollover
• Supplemental Plan mechanics that matter for a rollover
• DROP mechanics after HB 3158
• What DPFP payments are eligible to roll
• The DPFP-to-gold-IRA rollover in eight steps
• Direct vs indirect: the 20 percent withholding rule
• The public safety officer age 50 exception and what happens when you roll
• What gold the IRA can hold
• Texas advantages: zero state tax and the Texas Bullion Depository
• Direct vs indirect at a 200,000 dollar illustrative lump sum
• The gold IRA fee stack you will see
• Check whether your DPFP distribution is eligible to roll
• Worked example: a DPFP DROP retiree rolls a lump sum
• When rolling a DPFP distribution into a gold IRA is a bad idea
• DPFP to gold IRA FAQ

DPFP structure: one system, two plans

DPFP is the retirement plan for sworn Dallas police officers and firefighters. Unlike Houston, which runs three separate systems for police, fire, and general employees, Dallas runs a single system that covers both police and fire under one board of trustees. The system's offices are at 4100 Harry Hines Boulevard, Suite 100, Dallas, TX 75219, with member services reachable at 214-638-3863.

DPFP is one legal entity but administers two coordinated plans. The Combined Pension Plan covers all sworn members and pays the primary retirement benefit. The Supplemental Plan, created by ordinance in 1973, covers only members serving in ranks above the highest corresponding civil service rank. Assets of both plans are co-invested through a Group Master Trust.

The plan traces back to a 1916 City of Dallas ordinance. It was established under Texas statute in 1933 by the 43rd Legislature as Article 6243a. The current statute is Article 6243a-1, restated by the 71st Legislature in 1989 and materially rewritten by HB 3158 in 2017.

Two mechanics show up in both plans and drive the rollover question. The retirement benefit is paid as a monthly annuity for life, and that annuity is not eligible for rollover under IRS Publication 575. The DROP account is where the rollover-eligible cash usually sits at separation.

Combined Pension Plan mechanics that matter for a rollover

The Combined Pension Plan is the primary DPFP plan. It covers every sworn Dallas police officer and firefighter, and it pays the base retirement annuity. Every plan mechanic below traces back to Article 6243a-1 as amended by HB 3158 or to the DPFP Summary Plan Description.

HB 3158 divided the active membership into two groups by hire date. Members whose most recent hire date is before September 1, 2017 sit under one framework. Members whose most recent hire date is on or after September 1, 2017 sit under another. Contribution rates, benefit accrual, and normal retirement age were reset for the post-2017 group.

Contribution rates, benefit accrual percentages, cost-of-living adjustment rules, and normal retirement ages were rewritten in the 2017 statute. Because those numbers can be revised by later legislation and by DPFP board rules, DPFP asks members to confirm the current provisions on the plan's Summary Plan Description and on the pension-system-profile page. Do not rely on a plan handbook from before 2017.

A refund of member contributions is the exit for a Combined Pension Plan member who separates without vesting. The refund is issued as a direct rollover to a traditional IRA or to another eligible employer plan under the DPFP Special Tax Notice. The city portion of contributions is never refunded to a member.

A retiring member's monthly benefit is calculated at separation. That benefit is a lifetime annuity and is not an eligible rollover distribution. A lump-sum DROP balance is separate from the monthly annuity and is the primary source of rollover-eligible cash at retirement.

Supplemental Plan mechanics that matter for a rollover

The Supplemental Plan is a separate DPFP plan created by City of Dallas ordinance in 1973. It covers only members serving in ranks above the highest corresponding civil service rank. It pays an additional benefit on top of the Combined Pension Plan benefit. Both plans are administered by the same DPFP board of trustees.

Supplemental Plan benefits, like Combined Plan benefits, are paid as a monthly annuity at retirement. The monthly annuity is not eligible for rollover. If a Supplemental Plan participant separates before vesting and a refund of member contributions is issued, that refund is an eligible rollover distribution under IRC Section 402(c).

The Supplemental Plan's DROP is coordinated with the Combined Plan's DROP through DPFP administrative rules. A member who elects DROP participation typically has one integrated DROP account rather than two parallel accounts. Confirm the current DROP integration rules directly with DPFP before filing paperwork.

Assets of the Supplemental Plan and the Combined Pension Plan are co-invested through a Group Master Trust for efficiency. Each plan retains its separate legal identity and separate actuarial valuation. DPFP publishes an Actuarial Valuation as of January 1 each year for both plans.

DROP mechanics after HB 3158

The Deferred Retirement Option Plan is where most DPFP retirees find rollover-eligible cash. A DROP-eligible member who has reached retirement eligibility can elect DROP, at which point their monthly benefit is calculated and frozen, and further benefit accruals stop. The member continues working. Notional monthly benefit payments accrue in a bookkeeping account.

HB 3158 rewrote every substantive DROP rule effective September 1, 2017. The pre-2017 DROP was uncapped in duration and paid interest based on plan investment returns. The revised DROP under HB 3158 introduced caps on participation and revised the interest crediting method.

Because the 2017 statute and later DPFP board actions have adjusted these numbers, DPFP asks members to check the current Summary Plan Description and DROP rules before filing. A DROP participant is issued the Special Tax Notice Regarding Plan Payments at separation. That notice walks through the direct rollover and indirect rollover choice.

A DROP balance at separation is paid as a lump sum, as a partial lump sum with the remainder left in the account, or as monthly distributions from the balance. A lump-sum DROP payment is an eligible rollover distribution under IRC Section 402(c). Monthly distributions over life expectancy are not eligible for rollover.

DROP participation does not increase the monthly annuity. It shifts what would have been paid to the retiree in monthly annuity checks into a lump-sum bookkeeping account. That trade-off matters for a rollover, because the DROP balance is available in a form that can move to a gold IRA and the monthly annuity is not.

What DPFP payments are eligible to roll

The federal rule is the same across every Texas public pension system. IRC Section 402(c) defines an eligible rollover distribution as any distribution from a qualified plan, with narrow exclusions. The main exclusions are a series of substantially equal periodic payments over the life expectancy of the recipient and a required minimum distribution. A lump-sum DROP payment and a lump-sum refund of member contributions both meet the eligible-rollover definition. A monthly annuity does not.

The DPFP-to-gold-IRA rollover in eight steps

The mechanical sequence is the same whether the funding source is a DPFP DROP lump sum, a partial DROP lump sum, or a refund of member contributions. The order does not change with the plan of origin, and it does not change based on Combined or Supplemental participation.

1. Confirm the DPFP distribution is eligible for rollover. A DROP lump sum and a lump-sum refund of member contributions are eligible rollover distributions. A monthly annuity is not.
2. Open a self-directed IRA. A precious-metals IRA requires a qualified non-bank trustee or self-directed IRA custodian. Equity Trust Company, STRATA Trust, and GoldStar Trust are commonly used with Texas accounts, and Equity Trust is the current custodian for storage at the Texas Bullion Depository.
3. Pick a gold IRA dealer. The dealer sources the metal and coordinates with the custodian. Verify the dealer partners with your chosen custodian and quotes tight spreads on common bullion coins and bars.
4. Request the DPFP paperwork. Contact DPFP for the distribution or refund form and the Special Tax Notice Regarding Plan Payments. DPFP is the single point of contact for both Combined Pension Plan and Supplemental Plan payments.
5. Complete the rollover election. Enter the receiving custodian by name, "for the benefit of" your new IRA account number, and the amount to be rolled. Have the receiving custodian sign to certify the plan is eligible to receive the rollover.
6. Submit the paperwork and let the direct rollover fund the IRA. The check or wire is made payable to the custodian, not to you. No federal withholding applies. No 60-day clock runs.
7. Place the metal order. Once the cash arrives inside the new IRA, instruct the custodian to pay the dealer for IRS-approved bullion or coins meeting IRC 408(m)(3) fineness rules. The dealer ships to an IRS-approved depository, including the Texas Bullion Depository through Lone Star Tangible Assets.
8. File the right forms next April. DPFP issues Form 1099-R with distribution code G for a direct rollover. The receiving custodian issues Form 5498. Report the gross amount on Form 1040 line 5a with a taxable amount of zero on line 5b.

Direct vs indirect: the 20 percent withholding rule

Federal rollover mechanics offer two paths. A direct rollover sends the DPFP cash from the plan straight to the receiving IRA custodian. No withholding applies. No 60-day clock starts. This is the default recommendation on any DROP or refund rollover.

A payment made to the retiree instead triggers IRC Section 3405. The plan must withhold 20 percent for federal income tax on any eligible rollover distribution paid to the retiree. The DPFP Special Tax Notice explains the same rule.

The retiree then has 60 days to redeposit the full pre-withholding amount into the new IRA. The missing 20 percent has to come from personal savings during that window. On a 200,000 dollar illustrative DPFP DROP lump sum, that means 40,000 dollars is withheld and 160,000 dollars arrives, so the retiree must add 40,000 dollars from personal savings within 60 days to keep the rollover whole.

The 20 percent withholding is later credited against the federal tax bill at filing. If the retiree redeposited the full pre-withholding amount on time, the credit returns as part of the refund. If the retiree redeposits only the 80 percent that arrived, the missing 20 percent is treated as a taxable distribution. A 10 percent federal early-withdrawal penalty stacks on top for retirees under age 59 and a half unless an exception fits.

Failing the 60-day window has narrow relief. IRS Revenue Procedure 2016-47 and later guidance allow a self-certification waiver in a defined list of hardships, such as a plan administrator error or a serious illness. Do not plan on that safety net.

The public safety officer age 50 exception and what happens when you roll

IRC Section 72(t)(2)(A)(v) allows a penalty-free distribution from a qualified employer plan on a member who separates from service in or after the calendar year they turn 55. For a public safety officer, IRC Section 72(t)(10) lowers that age to 50. DPFP is a governmental qualified plan, and DPFP members are qualified public safety employees.

A distribution taken directly from DPFP at or after age 50 is not subject to the 10 percent federal early-distribution penalty. The distribution is still taxable federally. Texas has no state personal income tax, so no state layer applies.

The exception does not survive a rollover. Once the DPFP cash moves into an IRA, the IRA distribution rules apply. The 10 percent penalty reappears on any IRA withdrawal before age 59 and a half unless a different IRA-side exception fits.

Practical implication for a DPFP officer separating between 50 and 59 and a half. If some of the cash is needed for living expenses within the next few years, keeping a portion of the account inside a different qualified plan preserves the public-safety-officer penalty-free path. Members who need short-term cash usually solve this through a next-employer 401(k), 403(b), or 457(b) if one is available.

What gold the IRA can hold

IRC Section 408(m) generally bans collectibles inside an IRA and then carves out an exception for bullion and certain coins that meet a fineness threshold. The gold floor is 99.5 percent purity. Silver is 99.9 percent. Platinum and palladium are 99.95 percent.

Two coins are named statutory exceptions inside the rule. The American Gold Eagle is IRA-eligible at 91.67 percent purity, which is 22-karat. The American Silver Eagle is IRA-eligible at 99.9 percent. Proof Eagles qualify when held in original mint packaging with the certificate.

Bars must come from a refiner or assayer approved by NYMEX, COMEX, LBMA, or produced by a national government mint. Common eligible names include PAMP Suisse, Credit Suisse, Valcambi, the Royal Canadian Mint, and the Perth Mint.

Common eligible coins include the American Gold Eagle by statute, the American Gold Buffalo at 99.99 percent, the Canadian Gold Maple Leaf at 99.99 percent, the Austrian Gold Philharmonic at 99.99 percent, and the Australian Kangaroo at 99.99 percent. The South African Krugerrand sits at 91.67 percent gold with no statutory exception, and it is not IRA-eligible.

Texas advantages: zero state tax and the Texas Bullion Depository

Two Texas features change the wrapper around a federal rollover.

Article 8, Section 24 of the Texas Constitution prohibits a state personal income tax. Any taxable IRA distribution, including a botched indirect rollover, a future required minimum distribution, or a partial cash retention from a DPFP DROP or refund, is taxed at the federal level only. A Texas resident does not pay a state layer on top.

Texas also runs its own bullion depository. The Texas Bullion Depository is an agency of the State of Texas, authorized by House Bill 483 signed by Governor Greg Abbott on June 12, 2015. It has operated since 2017 on a purpose-built 10-acre campus in Leander, Texas, with Lone Star Tangible Assets LP as the depository contractor.

IRA storage is available at the depository. The Texas Bullion Depository states plainly that it is available for IRA storage through its operator LSTA, which received IRS approval as a nonbank trustee in 2023. Equity Trust Company is the first self-directed IRA custodian that works with the depository, and a Dallas retiree can ask a gold dealer to coordinate delivery with Equity Trust.

Storage features published on the depository's site include a purpose-built high-security facility with 24/7 monitoring, insurance through Lloyd's of London, and segregated storage without commingling of client metal. IRA storage fees are negotiated between the custodian, the gold dealer, and the depository contractor. They can differ from the standard retail schedule.

Direct vs indirect at a 200,000 dollar illustrative lump sum

The chart below compares the two rollover paths on an illustrative 200,000 dollar DPFP DROP lump sum. The direct-rollover bar shows the trustee-to-trustee outcome under IRC Section 401(a)(31), where the full amount reaches the custodian. The indirect-rollover bar shows the 60-day path under IRC Section 3405, where 20 percent is withheld and the retiree must add personal savings to keep the rollover whole.

Two clarifications on the chart. The 200,000 dollar figure is illustrative and not a DPFP-specific number; substitute your own DROP balance from your annual statement. The withheld 40,000 dollars is credited against the federal tax bill at filing. The retiree still needs that cash on hand within 60 days to complete the rollover, or the 40,000 dollars is taxable and can trigger the 10 percent early-withdrawal penalty.

The gold IRA fee stack you will see

DPFP does not charge a visible administration fee on a DROP lump sum or on a refund of member contributions. The system absorbs those costs. A self-directed gold IRA carries its own fee stack, with several stacked line items the retiree pays directly.

The dealer markup is the line item with the widest range. Common bullion coins and bars carry tight spreads. Premium or proof coins marketed as exclusive or limited carry markups that can be several times higher. A clean DPFP rollover is undone quickly if the metal is bought at a 25 or 35 percent markup over spot.

Check whether your DPFP distribution is eligible to roll

Before calling a provider, confirm the DPFP payment is actually eligible to roll under federal rules. The screening tool below walks through the eligibility questions and timing rules. It is a triage step, not legal or tax advice.

Can you roll your account into a gold IRA? Eligibility checker

Most retirement money can move into a gold IRA once it is an eligible rollover distribution. Pick your account and situation for a general answer. Always confirm the specifics with your plan administrator or custodian.

Account typeTraditional IRARoth IRASEP IRASIMPLE IRA401(k) or 403(b) from a former employer401(k) or 403(b) at your current employerGovernmental 457(b)Thrift Savings Plan (TSP)Pension lump sum or refund (after you separate) Your situationSeparated from that employerStill employed there, under 59 and a halfStill employed there, age 59 and a half or older

Check eligibility

General guidance only, not tax or financial advice. Eligibility depends on your specific plan document and IRS rules; confirm with your plan administrator and a tax advisor. A direct trustee-to-trustee transfer avoids the 60-day rule and 20% withholding.

Picking a company that explains every fee up front is the first step. Get the free gold IRA company checklist.

Worked example: a DPFP DROP retiree rolls a lump sum

Your next step

If a DPFP DROP or refund rollover into a gold IRA looks like the right move, the highest-leverage action is to vet the provider before signing any DPFP paperwork. Augusta Precious Metals is our primary affiliate partner and publishes a free gold IRA company checklist built for that vetting step.

Get the Augusta Precious Metals gold IRA company checklistSponsored link. Use it to evaluate any provider you call, including Augusta itself. Past performance is not a guarantee of future results.

When rolling a DPFP distribution into a gold IRA is a bad idea

DPFP to gold IRA FAQ

Sources

1. Dallas Police and Fire Pension System. Pension system profile and Summary Plan Description. dpfp.org. Checked July 2026.
2. Dallas Police and Fire Pension System. 2025 ACFR, financial statements through December 31, 2024. dpfp.org. Checked July 2026.
3. Dallas Police and Fire Pension System. Actuarial Valuation as of January 1, 2026 (Combined Pension Plan and Supplemental Plan). dpfp.org. Checked July 2026.
4. Vernon's Texas Civil Statutes, Article 6243a-1. Governing statute of the Dallas Police and Fire Pension System, restated by the 71st Legislature in 1989 and materially rewritten by HB 3158. statutes.capitol.texas.gov. Checked July 2026.
5. Texas Legislature Online. HB 3158, 85th Legislature Regular Session. Passed unanimously; signed by Governor Greg Abbott on May 31, 2017; effective September 1, 2017. capitol.texas.gov. Checked July 2026.
6. Internal Revenue Service. Publication 575: Pension and Annuity Income. irs.gov/publications/p575. Checked July 2026.
7. Internal Revenue Service. Publication 590-A: Contributions to Individual Retirement Arrangements (IRAs). irs.gov/publications/p590a. Checked July 2026.
8. Internal Revenue Service. Publication 590-B: Distributions from Individual Retirement Arrangements (IRAs). irs.gov/publications/p590b. Checked July 2026.
9. Internal Revenue Service. Rollovers of Retirement Plan and IRA Distributions. irs.gov/retirement-plans. Checked July 2026.
10. Internal Revenue Service. Topic No. 413, Rollovers from Retirement Plans. irs.gov/taxtopics/tc413. Checked July 2026.
11. Internal Revenue Service. Topic No. 558, Additional Tax on Early Distributions from Retirement Plans. irs.gov/taxtopics/tc558. Checked July 2026.
12. Internal Revenue Code Section 402(c). Rollovers from qualified plans. uscode.house.gov. Checked July 2026.
13. Internal Revenue Code Section 401(a)(31). Direct rollover option. uscode.house.gov. Checked July 2026.
14. Internal Revenue Code Section 3405. Special rules for pensions, annuities, and certain other deferred income; 20 percent mandatory withholding. uscode.house.gov. Checked July 2026.
15. Internal Revenue Code Section 408(m). Collectibles rule and bullion exception. uscode.house.gov. Checked July 2026.
16. Internal Revenue Code Section 72(t)(2)(A)(v). Separation-from-service exception at age 55. uscode.house.gov. Checked July 2026.
17. Internal Revenue Code Section 72(t)(10). Public safety officer exception at age 50. uscode.house.gov. Checked July 2026.
18. United States Tax Court. McNulty v. Commissioner, 157 T.C. No. 10 (November 18, 2021). Home-storage IRA confirmed as a full distribution.
19. Texas Bullion Depository. IRA Storage Services. texasbulliondepository.gov. Checked July 2026.
20. Office of the Texas Comptroller of Public Accounts. Texas Bullion Depository overview. comptroller.texas.gov. Checked July 2026.
21. Texas Constitution, Article 8, Section 24. Prohibition on a state personal income tax. statutes.capitol.texas.gov. Checked July 2026.

By the Harry’s Coins Editorial team. Last reviewed July 2026.