Impact statement on Houston pension reform released

The Legislative Budget Board has released its actuarial impact statement on HB43, the bill to ‘reform’ the City of Houston’s employee pensions. You can read the statement online or download a pdf to read it offline.

I clipped the charts for each of the plans:

If you combine those three statements, you get this:

As you can see, at present the bill reduces the total liability by $2.8 billion, close to the $3 billion that Rep. Dennis Paul mentioned earlier. I’m not informed enough to comment further but there are some very good comments here and here and I hope those commenters chime in after reading the impact statement.

I received an email this morning from a firefighter that prefers to stay anonymous. I think that it is worth sharing.

Thank you for accepting my email, although we disagree at times, for the most part I read all of your articles and couldn’t agree more with the state of Houston politics.

Since rules I work under prevent my from identifying with my employer, I will just say that I am a lifetime Houston resident and one of the few in my organization who is a city voter. I have been a member of HFRRF (Firefighters Pension) for 13 years.

Some quick facts I wish every resident knew. Our fund is the #1 rated fund in the state, a TOP 20 fund nationally. Houston says their unfunded liability is around 8 billion dollars. Our fund is just 18% of that problem. FIrefighter benefits are just 2-3% of the city budget per year. 75% of our funds assets have been made on member contributions, and we ALL have no option, but to pay 9% of our pretax amounts to the fund, every check, every time.

Firefighters are consistently the #1 rated service provided to city residents because regardless of staffing, manpower, weather, etc, the service is always available. It is all done on a skeleton budget and often with equipment that is ancient in terms of the fire service and in comparison with surrounding departments.

But lets stop with “emotional pleas”, because that’s not what I am here for. Firefighters want pension reform for the city. Why would we want to push towards bankruptcy in protection of our benefits? These attacks by the mayor in media and in city council meetings make absolutely no sense. If anyone missed it, he threatened the widow of a District Chief who served 34 years before his death due to cancer, that without reform “her check would stop.”

Our members agreed to work with city negotiators to pay our 18%, and balance the books of the city. But is it a far fetched question to ask of ANYONE, that if you went to the finance department to buy your vehicle and suddenly the price skyrocketed and the original deal was off the table, would that person not be upset? Our 18% suddenly skyrocketed up to 35-45% to make up for the balances of pension funds the city mismanaged for years.

Add in to that equation a city generated “Corridor Plan” which could continue to cut active firefighters benefits every 3 years. Now these cuts aren’t just diminishing returns like a bad investment would get you, these would actually cut into members paychecks, every 3 years, in a department that has not have a net pay raise (because our 1% was quickly eaten up by insurance costs) since 2008.

On top of all of this, the mayor wants to saddle our taxpayers with a 1 Billion dollar pension obligation bond, using our name, but our fund not actually receiving 1 dollar of that. That money would be for the deficits created by city managed municipal and police funds. Sorry that we don’t like being listed as a cosigner on someone who chronically mismanages their debt.

Pension reform would benefit city employees the most, look no further than Dallas to see what the collapse of pensions look like. As it stands now, the city can comprehensively reform the municipal and police pensions through their meet and confer agreements. Our Chairman of HFRRF has stated, over and over than our fund would do the same, but all we are asking is for a fair deal. We NEVER traded pension benefits for pay raises. That’s why almost every paid department surrounding Houston is paid noticeably more rank for rank.

Please understand these facts when we are faced with media attacks and ultimatums, or when we are painted as greedy or trying to railroad Houston taxpayers.

Please email or call your state representatives, and ask for one thing, a deal that has actually been negotiated by both parties. That alone will allow for a deal to be done that is fair to firefighters and beneficial to the Houston taxpayers.

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