The Houston Firefighters’ Relief and Retirement Fund is waiting on a response from Mayor Annise Parker about a counter proposal to her proposed plan to put future city firefighters in a new pension plan overseen by the city, said Todd E. Clark, board chairman.
An Oct. 17 meeting between the board and the mayor was canceled by the mayor but is expected to be rescheduled, Mr. Clark wrote.
The board’s counter proposal “keeps the new hires in (the) current system, avoids litigation, and does not hurt morale,” said Mr. Clark in an e-mail. The plan also frees up $82 million in pension costs for the city of Houston over the course of three fiscal years, he added.
Mr. Clark did not provide details of the plan and declined further comment because the board has not heard Ms. Parker’s response.
In August, Ms. Parker unveiled a proposal for a new defined benefit plan for incoming city firefighters managed by the city. Under state law, the city is excluded from financial decisions related to the existing $3.8 billion firefighter pension plan, including benefit levels and employer contributions. All decisions are made by the pension fund board.
The mayor’s proposed plan would be managed by an appointed committee and plan assets would be invested and held by an independent institutional trustee. Additionally, employees would contribute a mandatory 9% of their base pay or one-third of the total actuarially determined contribution rate, whichever is greater, to the plan. Retirement eligibility would be determined based on age and years of service and annual cost of living increases would not be guaranteed.
The mayor’s plan is expected to save the city $110 million in costs over the next 20 years, according to a news release from the mayor’s office.
Mr. Clark said the mayor’s plan is “unlawful” and that the board’s counter proposal provides “more cost savings.”
Darian Ward, spokeswoman for the mayor, could not immediately provide comment by press time. However, spokeswoman Janice Evans previously told Pensions & Investments, “We’re happy (HFRRF) is willing to sit at the table.”