Long concerned about the cost of Houston’s pensions and stymied in her attempts at reform, Mayor Annise Parker is considering a dramatic step to place new firefighters into a separate, less generous pension plan, sources with knowledge of the discussions said.
Officials acknowledge the existing Houston Firefighters Relief and Retirement Fund likely would sue the city over the idea, which has not yet been formally proposed.
Houston Firefighters Relief and Retirement Fund chairman Todd Clark said he had not heard of the idea. He was not receptive.
“We would have to look at it and see exactly what it is they’re talking about,” Clark said. “If that’s the case, the pension fund will defend the firefighters and the pension system. That will be a fight that we will definitely get into. We won’t support changing our system for the new hires.”
Councilman Stephen Costello said the idea of a separate pension fund for new hires arose after the city sued the firefighters pension system in January, claiming it was unconstitutional for Houston to be on the hook for payments over which it had no control.
Lawyers for the pension fund, sources said, argued the Legislature’s control was not absolute, and that the city could create a new pension system if it wished.
The city lost a ruling at the state district court level in that case and is appealing. Costello said the current idea appears designed to invite another lawsuit as a legal test.
“You never know until you ask, so I think that’s what the city is going to try to accomplish,” said Costello, who chairs the council’s budget committee and long has advocated pension reforms. “I think the city is testing the water in terms of the constitutionality of the state regulating our pension system.”
The benefit structure of the new pension plan under discussion, Costello and other sources said, would mirror the pension new police officers get, but without automatic cost-of-living adjustments. That benefit is the single most expensive portion of the city’s pension plans.
See here for the background on the city’s lawsuit. I got a press release from the HFRRF about the ruling in May but never saw a news story about it. There never was one as far as a Google search can find, but you can find the press release here. Not much to say about this since it’s basically vaporware, but I do agree with CM Ed Gonzalez in the story that if you’re going to reduce pension payouts to future firefighters, you’re going to have to pay them more up front, Beyond that, we’ll see what if anything happens.