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City sues firefighter pension board

We knew this was coming.

The city of Houston sued the firefighters pension board in state District Court on Wednesday in an effort to pry open the retirement system’s books for a look at supporting data behind the $61 million annual bill it sends to City Hall.

“We need access to this very basic information if we are to be able to protect taxpayers who foot the bills and the employees who deserve fair, financially secure retirements,” Mayor Annise Parker said in a statement released by her office. “I do not want a situation where we must choose between vital city services and paying retirement benefits. We have to be able to accurately plan for the future. It is a critical piece in our long-term budget process. Since our repeated requests for the information have been turned down, we are left with no alternative other than relief in the court system.”

You can see a copy of the lawsuit here. As the story notes, Mayor Parker spoke of this back in February. The story at the time said “the city wants information on beneficiaries of a deferred option retirement program, in which employees eligible for retirement continue working and start an account credited with the amount of pension payouts he or she would have received plus interest” and that they believe “some DROP beneficiaries’ pension benefits exceed their salaries through the program”. Todd Clark, the chair of the Houston Firefighters’ Relief and Retirement Fund, wrote an op-ed in March claiming that the city already had the information it said it was seeking; it also made vague allegations about “wasteful” spending that didn’t impress me. Both sides can’t be right about what information the city actually has. We’ll see how the court sorts it out.

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10 Comments

  1. Jj says:

    I believe that what Todd Clark has said is that what he means by the City having the info is that City-appointed trustees sit on the Fund board and have access to the info. Of course, what he leaves out is that those people can’t share the info with the City because of their duty to the Fund and the confidentiality restrictions the Fund has adopted internally.

  2. Joseph Houston says:

    The city currently gets, and is the source of, all data regarding employees pay. It has access to the aggregate data from all three pension systems in terms of declared DROP participants but I believe the city wants individual data in order to make a better case for lowering HFD pensions as it has for HPD & municipal employees. Clark’s objection is over the privacy of individual members and knowing that the city offering up a handful of big DROP accounts for more attacks via the media will make lowering benefits easier.

    Kuff, Clark did not specify wasteful spending for the same reason few others in power do. Each expenditure has a built in constituency and he does not want to alienate groups of people. I personally provided you with many cuts that most would find wasteful or at least lower priority yet you did not respond (see your comment section for “If you can’t specify…” op-ed).

    Pensions are a form of employee compensation regardless of which type of pension you talk about. The city refuses to pay enough into them each year while still funding a lot of pet projects, a more honest approach being to just come right out and say; “Because I think HFD is paid too much…” or “I’d rather fund building more Wal-Marts, Targets, and Krogers in Houston regardless of their total sales figures remaining flat as a consequence, than paying employees what we promised…”. Seriously, is Parker going to offer to pay HFD employees as well as any of the other top ten departments in the country anytime soon? Is she going to at least consider that those cities are ALSO paid better in retirement benefits than HFD?

    If any of you want to reset the clock for future employees, look how well that worked out for HPD and the municipal workers. With half the department able to walk away tomorrow and absolutely no means of replacing them for years and years, a hint of appreciation might be in order. The workers show their appreciation for the citizens day in and day out by rushing into burning buildings, dealing with chemical fires and hazmat situations, and anything else needed to save lives at great personal risk so expecting contractually promised benefits shouldn’t even be on the table for discussion.

  3. And I appreciate your honest feedback, Joseph. I don’t agree with your view of what constitutes “waste”, but my point wasn’t to get into that argument. It was simply to note that if you want to argue, as Clark did, that your particular interest is more worthy of protection than other people’s interests, it’s on you to provide specifics. If that means you might alienate some group that you had hoped would sympathize with you, well, that’s life. I’ve stated repeatedly in this space that there’s been too much focus on pensions and too little on other options such as promoting growth. I’m not interested in gutting pensions, I don’t buy the alarmism over public pension funds, and I believe that way too much of the sacrifice that we are constantly being called on to make has been shared by far too few people. But just because I agree that we ought to honor the deal we’ve made with our public employees doesn’t mean I will uncritically buy the argument that there’s a bunch of unspecified “waste” that we can easily eliminate instead. Last I checked, there’s a lot of people who think pretty much anything we spend on public employees – not just pension payments but salaries and benefits too – constitutes “waste”. I say a little circumspection about the use of that loaded term is in order.

  4. Steven says:

    Clark speaks plainly knowing that most people aren’t going to split hairs over terminology. With limited resources comes the need to prioritize all spending. Fire protection and police are high on the list of more people, if you take away or reduce pensions, you will weaken the resolve of those who stay.

  5. Joseph Houston says:

    One man’s waste is another man’s frill or yet another man’s “lower priority”. Houston is way ahead of the curve when it comes to lowering benefits, making it a de facto employer of last resort compared to other big cities, the feds, and a wide assortment of private organizations. I don’t fault Todd for using such terms because ultimately, pensions are part of every full time employee’s compensation. Lowering benefits to save a few bucks in the short term has already cost the city in numerous ways but he is using the terms that draw attention.

  6. Todd Clark says:

    Kuff,
    As Chair of the Houston Firefighters Relief and Retirement Fund, we will be appealing the decision handed down by Judge Burke . If you want to talk about wasteful spending, this lawsuit is a prime example. The city is also paying $395,000 to audit the pension funds, talk about extreme.
    Keep this in mind also, the COH only pays 20% of the benefits , 7% comes from the Firefighters contributions and 73% come from income from investments. Out of the general budget, the three pension systems only use 9%. When you look at the total budget the percentage is 7%. These numbers came right out the Task Force report and in no way cause the financial stress on the city that they claim. Since Mayor Parker took over as Mayor, she has tried to balance the budget on the backs of the Firefighters.
    We will continue to protect our members from these constant attacks.

    Todd Clark.
    Chair.
    HFRRF

  7. Ross says:

    Mr. Clark, the taxpayers of the City of Houston give you over $60 million per year. We damn sure have the right to make sure you aren’t misusing it or making bad assumptions about returns and future contributions. Get off your high horse and give the City the information they need to do the mandated actuarial audit.

  8. Todd Clark says:

    Ross,
    They already receive all the information they need in aggregate. What they are wanting is each members private financial information. That is like you releasing your financial information just because the COH asked for it. There are laws that protect financial information. Sorry you dont understand that.

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