Home Fire News Houston Firefighters Relief and Retirement Fund suing over pension reform law

Houston Firefighters Relief and Retirement Fund suing over pension reform law


The Houston Firefighters Relief and Retirement Fund filed a lawsuit Tuesday afternoon arguing the city’s pension reform plan is unconstitutional.

The Houston Chronicle reports Texas Governor Greg Abbott signed Houston’s pension reform bill into law Wednesday, meaning the measure takes effect July 1.

The Houston Firefighters Relief and Retirement Fund, which names Houston Mayor Sylvester Turner and numerous city officials in the lawsuit, argues the reform plan unlawfully undercuts the board’s legal authority to “select legal counsel and an actuary and adopt sound actuarial assumptions” and seeks to have a court permanently block the city from acting as though the reforms will become law.

The fire pension’s board contends it will not take part in what it considers any action it feels is illegal, and the lawsuit asks the court to block the city from acting on the measure.

In a statement to the Houston Chronicle, fire pension Chairman David Keller said, “Our board is already being asked to knowingly violate its duty to the Texas Constitution through provisions contained in SB 2190. We will not collude in an act we believe to be illegal.”

The new law positions the city to address a 16-year financial crisis and pay down its $8.2 billion pension debt over 30 years by issuing $1 billion in pension obligation bonds, cutting retiree benefits by $2.8 billion and capping future costs if the market dips, according to the Houston Chronicle.

If granted, the Houston Chronicle reports, the injunction presumably would extend to the city budget for the fiscal year that starts July 1, which City Council was scheduled to discuss Wednesday. That budget assumes the reforms and their accompanying benefit cuts will take effect, and puts the city’s general fund payment into the firefighters fund at $70 million, down from $93 million in the current budget.

The fund argues its lawsuit was necessary in part because it views the correct payment as $148 million. That is because the fund, also on Tuesday, informed city officials that it has revised its assumed rate of investment return from 8.5 percent down to 7.25 percent, a move fire fund leaders long have resisted and argued was unnecessary, according to the Houston Chronicle.

The Houston Chronicle reports the fund felt such disparity left them no choice but to file the lawsuit.

“The city’s proposed budget indicates that the city plans to allocate approximately half of the amount that should be contributed under the current statute,” the lawsuit states. “Thus, the fund had no option but to file this suit.”


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