The city of Houston will save more than $70 million in pension payments over the next three years and halt lawsuits and proposed pension changes aimed at city firefighters under an agreement signed Thursday by Houston Mayor Annise Parker and the $4 billion Houston Firefighters' Relief and Retirement Fund.
Starting July 1, members of the firefighters pension fund over the next three fiscal years will contribute 12% of their salaries to the pension plan, up from the current 9%. Employer contributions will be set at 25.8% of payroll for fiscal year 2016 and reduced to 24% in fiscal years 2017 and 2018, said a letter from Todd Clark, the pension fund's chairman, on HFRRF's Facebook page.
In exchange for the savings, Ms. Parker will withdraw her proposal to place future city firefighters in a new pension plan overseen by the city. The city also will oppose any proposed legislation in the current legislative session that would impact the pension fund, and city lawsuits challenging the constitutionality of the existing pension plan and the availability of financial information on its members will be dropped.
“The proposal protects Houston's citizens by keeping and recruiting the best firefighters we can get,” Mr. Clark said in a news release. “We are pleased the mayor supports our proposal because it protects promises made to our firefighters and avoids reduction of benefits to new hires, which would be harmful to all parties.”
“This protects taxpayer interests and provides budget certainty for the next three years,” said Ms. Parker in a news release. “The agreement was achieved through good faith negotiations by both parties. While it is not the pension reform I have sought, it is a step forward. The work must not end here.”
The agreement still needs legislative approval.