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Pension Deal Between The City Of Houston & Firefighters Has Many Critics

It took five years and two lawsuits to reach an agreement. The board and officials say this deal is better than no deal.

The agreement ends a five-year-long dispute between the city and the Houston Firefighters’ Relief and Retirement Fund. Both sides will support a bill to be filed in the Texas Legislature that would save the city more than $70 million in the short term.

It would temporarily increase firefighters’ contribution to their pension plan from 9 percent to 12 percent of their salaries for the next three years; and the city’s contribution would decrease from a third to about a fourth of the overall payroll of firefighters.

Council member Stephen Costello calls it a bad deal. He says it will cost the city more over time and gives the perception that the problem has been solved.

He wants the authority over municipal pensions transferred from the state to the city.

Pension.JPGState Rep. Sylvester Turner (podium) speaks about the pension agreement at the Houston Firefighters’ Relief and Retirement Fund building in north Houston.

“We get local control. We can then sit down with all three pension boards and talk about how we get pension reform so that we develop a defined benefit plan that’s 100 percent funded,” Costello said. “Not 80 percent funded, not 90 percent funded, but 100 percent funded.”

Mayor Annise Parker said that’s what she prefers as well. She said the agreement is a step in the right direction.

“It positions the city, the pension for the next administration to build on this new relationship and the new cooperation that we’ve achieved to figure out if there is a way to move forward to achieve real pension reform,” Parker said.

The Greater Houston Partnership also criticized the deal, because it does nothing to address the city’s long-term pension problem.

Candidates for mayor and city controller released similar statements.

State Sen. John Whitmire and Rep. Sylvester Turner have agreed to sponsor the bill needed to complete the pension agreement. Whitmire said critics don’t understand how the Legislature works.

“In the 42 years that I’ve been in the Legislature, very seldom have I gotten the exact piece of legislation that I wanted,” the senator said. “Or the world would be a better place.”

Provided the bill becomes law. the agreement also includes:

  • Drop two lawsuits against the fire pension board.
  • The mayor will not seek City Council approval of the new pension plan she proposed last August for incoming fire cadets.
  • Both parties will oppose any proposed legislation during the current session that impacts city firefighter pensions.
  • Any payment owed a retiring firefighter for unused leave time will be made as a pre-tax contribution into the employee’s Deferred Retirement Option Account as opposed to a taxable lump sum cash payment.

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Florian Martin

Florian Martin

Business Reporter

Florian Martin is currently the News 88.7 business reporter. Florian’s stories can frequently be heard on other public radio stations throughout Texas and on NPR nationwide. Some of them have earned him awards from Texas AP Broadcasters, the Houston Press Club, National Association of Real Estate Editors, and Public Radio...

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