Houston Firefighters' Relief and Retirement Fund’s board voted 7-2 on Monday to accept Houston Mayor Sylvester Turner’s proposal to reduce benefits and issue pension obligation bonds to reduce total liabilities by $3.5 billion, the final city pension fund to do so, said Janice Evans, Mr. Turner's spokeswoman, in an e-mail.
The Houston City Council will vote Wednesday on the proposal, which adopts a 30-year closed amortization schedule to pay off the $7.7 billion in unfunded liabilities across the pension funds — the $3.8 billion firefighters plan, $4.6 billion Houston Police Officers' Pension System and $2.5 billion Houston Municipal Employees Pension System.
The mayor’s proposal also includes benefit reductions in the three pension funds that would reduce total liabilities by $2.5 billion, and the city would also issue $1 billion in pension obligation bonds, $750 million of which would be contributed to the police officers' pension system and $250 million of which would be issued to the municipal employees’ pension plan.
In a news release following the firefighters’ pension fund’s board vote, Mr. Turner said: “This is a special moment for the city because it represents the first time ever that all three pension systems have come to the table and worked in a productive manner. Everyone is on the same page, and we are moving forward as a united front. We’ve all known there would have to be changes. I wish it had happened 15 years ago. It did not; so it is up to us to make it happen. This plan takes the issue off the table for good.”