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Mayor Parker proposes new firefighter pension plan for cadets

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An aide awaits the start of Mayor Parker's press conferenc in Proclamation Room Aug 21 2014
An aide awaits the start of Mayor Parker's press conferenc in Proclamation Room Aug 21 2014photo by Marc Pembroke

On Thursday, August 21, at an afternoon press conference in the proclamation room at City Hall, Houston Mayor Annise Parker outlined a proposal for a new pension plan for new firefighters. City Council members were being briefed by the City Attorney and the Mayor's staff at a meeting of the Budget and Fiscal Affairs Subcommittee on Benefits at the same time. Currently, under state law (Texas Civil Code Article 6243e.2(l)), the Houston Firefighters Relief and Retirement Fund is a managed and controlled by beneficiaries of the fund through a board in Austin. The new plan would be controlled and managed in Houston.

The proposed plan has been prepared by pension specialists at the law firm of Norton Rose Fulbright. It has lower long-term costs and could save the city up to $110 million over the next 20 years. According the Mayor's press release, other features of the plan include

  • A pension formula which allows for retirement benefits u to 80% of base pay

  • Retirement no earlier than age 55 and with at least10 years of service

  • Retirement benefits calculated on the employee's highest consecutive 78-periods of base pay

  • Required employee contributions of nine percent of base pay or one-third of the total actuarially determined contribution rate, whichever is greater

  • Maximum lump sum payout of 20 percent of a member's annuity

  • Survivor annuity for spouse and eligible children

  • Supplemental annuity of $150 per month

  • On duty death benefit equal to 100 percent of base pay

The plan would be governed by a 5 member appointed committee comprised of a senior City Finance department employee, a senior City Human Services Department employee, a firefighter appointee, an independent mayoral appointee, and an independent appointee of the City Comptroller. Plan assets would be invested and held by an independent institutional trustee.

Apart from control by a local committee, the plan's rule for calculating retirement pay would prevent the current system called “spiking” which sets benefits at the highest single base pay, which can result in benefits much higher than a fire fighter's regular average salary.

Houston City Attorney Dave Feldman has filed lawsuits against the HFRRF in the past seeking access to audit data, challenging the statute that singles out Houston for different treatment and seeking damages against the actuarial firm that advised a prior mayor to accept the current arrangement. But none of those actions has resulted in a material change in the situation. Mayor Parker stated that the new plan was a possibility under prior law, but she has preferred to attempt to reform the current system.

Houston Firefighters union president Brian Sky-Eagle was waiting outside the Proclamation Room to offer his comments to the media immediately following the Mayor's remarks. He made it clear that the proposal will have no support from the union. He stated that he believed the current system is fine, and that it should be continued. He declined to comment on whether the current law that makes Houston the only city with no right to meet and confer on firefighter pensions is unfair or whether it should be changed.