Houston pension reform: good deal, bad deal, or what’s the deal?

The Houston Chronicle announced yesterday that Mayor Annise Parker and the Houston Firefighters’ Relief and Retirement Fund (HFRRF) had reached a tentative deal on pension reform. While the final details are still being worked out, the agreement would see “firefighters contribute more of their pay toward their retirement and have the city contribute less, for a term of three years.” In return, “the city would drop two lawsuits against the fire pension…[and] The city would agree not to lobby the Legislature for pension reforms for the three-year duration of the deal,” according to the Chronicle.

Without all the details being made public yet, it’s hard to tell whether this is a good deal or a bad deal. But even without knowing all the details, it’s easy to see that this is no deal at all. At least not yet. 

That’s because the HFRRF is one of a handful of local retirement systems that has successfully petitioned the state legislature to have some or all of its plan enshrined in state statute (pg. 89). That means that plan changes—even those agreed to by the Mayor and the HFRRF—must be approved by the legislature before they can go into effect.

This kind of setup has obvious consequences for things like local control.

Requiring community stakeholders to go through the legislative process—which happens only every other year and for 140 days at that—to make changes to their local retirement systems is an enormous roadblock for even the most motivated parties. Not only does it mean having patience and perseverance but also the right political connections. 

Obviously, this is not the ideal way to govern these systems.

People paying into these pension plans and those that are directly affected by them should have immediate oversight of how they operate, not Austin lawmakers. It’s silly to think that even relatively minor changes, like those agreed to by Mayor Parker and the HFRRF, are impossible to achieve absent the legislature.

It’s time the legislature restored local pension control and put the power back in the hands of the people that support these systems.

To read more about local retirement systems under state governance, see here.