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City reaches settlement in pension projection lawsuit

Old story, new development.

Houston has agreed to settle a lawsuit it filed four years ago against an actuarial firm whose predictions it blamed for contributing to the city’s multi-billion-dollar pension crisis for $40 million.

The city’s outside counsel, Susman Godfrey, would collect $11 million, and $29 million would be deposited into the city’s general fund. City Council must approve the settlement.

City Council approved the filing of the lawsuit in July 2014, saying Houston officials’ reliance on the advice of Towers Perrin, now known as Willis Towers Watson, led them to boost workers’ retirement benefits in 2001 and saddle taxpayers with unaffordable pensions costs as a result.

The city alleged negligence and malpractice and sought damages of $832 million — a figure later revised to $432 million.

See here, here, and here for the background. That first link is from 2004; it and the second link have most of the relevant information. Getting $29 million in cash doesn’t suck, but boy it would have been nice to have gotten better information in the first place. Nothing more to be done about it now.

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