Texas appeals court Judge John Donovan rejected the city of Houston’s claims that the law under which the Houston Firefighters' Relief and Retirement Fund operates is unconstitutional.
In 2014, Houston filed suit against the $3.8 billion pension fund, arguing that state law, which excludes the city from financial decisions related to the pension fund, including benefit levels and employer contributions, is unconstitutional. Those decisions are left to the pension fund board.
In an opinion issued Thursday, Mr. Donovan wrote that the law under which the pension fund operates is constitutional.
Specifically, regarding the contribution rates, Mr. Donovan wrote that the “city's contributions are set by (state law) and not arbitrarily decided by the board” and are “related to member salaries and contributions.”
The city has unsuccessfully petitioned the Legislature to overturn the pension fund's statute in the past. It is able to negotiate with trustees of the $4.6 billion Houston Police Officers' Pension System and $2.5 billion Houston Municipal Employees Pension System.
In May 2014, a Texas district court sided with the pension fund. The city appealed.
"It appears that the lawsuit was without any basis to begin with and the city has wasted both city and fund resources in a meritless lawsuit, which has been senselessly continued on appeal," observed David Keller, HFRRF chairman, in a news release on its website.
A city spokeswoman could not immediately be reached for additional information.