Discussion over public pensions is going on all over the United States. But two of them in Texas — involving city firemen — cast the matter in a different light. Houston and Fort Worth and their firefighter organizations are at odds over the pensions those cities provide their current and future fire and rescue personnel.
That it is occurring in two cities in the same state may not sound significant. But everything’s big in Texas. Houston is the nation’s 4th largest city, and Fort Worth is 17th; together they have 3 million residents —there are 20 states that have total populations smaller than that. So these discussions are indeed significant, since they involve benefits for personnel who protect the safety and lives of millions of people.
In Houston, Mayor Annise Parker (D) proposed in August that firefighters the city hires in the future be made participants of a new defined benefit plan, Pensions & Investments Online reports. The proposal called for:
• mandatory employee contributions of 9% of base pay or one-third of the total actuarially determined contribution rate, whichever is greater;
• eligibility based on age and years of service;
• annual cost-of-living increases not guaranteed;
• oversight by a committee appointed by the city; and
• plan assets to be held and invested by an independent trustee.
Parker’s office estimates that the proposal would save Houston $110 million over 20 years.
The Houston Firefighters’ Relief and Retirement Fund (HFRRF) has made a counter proposal, which would keep future firefighters in the current DB plan. The HFRRF says its proposal would save the plan $82 million over three years.
The mayor’s office and the HFRRF Board were to meet on Oct. 17, but the meeting was canceled. HFRRF Board Chairman Todd Clark has said that he expects the meeting to be rescheduled.
Almost 300 miles away in Fort Worth, that city’s Star Telegram reports that Forth Worth firefighters now have no pay and benefits contract with the city, since the most recent one expired on Sept. 30. It’s not that they haven’t been working on one — negotiations have gone on for more than two years. But there is a sticking point — the pension plan.
Agreement or no, the City Council is set to vote on a proposal that would change the way pension benefits are calculated for firefighters hired before Jan. 10, 2015. In determining a firefighter’s retirement pay, it would:
• reduce the multiplier used to calculate benefits from 3% to 2.5%;
• use the highest five years and not the highest three; and
• exclude overtime not built into their salary.
The Fort Worth Professional Firefighters seek a pension deal that would allow separating the firefighters’ pension fund from the Fort Worth Employees Retirement Fund, an arrangement that would allow them to increase their own contributions and maintain the current calculus for determining retirement benefits. The city opposes such a separation.
That it is occurring in two cities in the same state may not sound significant. But everything’s big in Texas. Houston is the nation’s 4th largest city, and Fort Worth is 17th; together they have 3 million residents —there are 20 states that have total populations smaller than that. So these discussions are indeed significant, since they involve benefits for personnel who protect the safety and lives of millions of people.
In Houston, Mayor Annise Parker (D) proposed in August that firefighters the city hires in the future be made participants of a new defined benefit plan, Pensions & Investments Online reports. The proposal called for:
• mandatory employee contributions of 9% of base pay or one-third of the total actuarially determined contribution rate, whichever is greater;
• eligibility based on age and years of service;
• annual cost-of-living increases not guaranteed;
• oversight by a committee appointed by the city; and
• plan assets to be held and invested by an independent trustee.
Parker’s office estimates that the proposal would save Houston $110 million over 20 years.
The Houston Firefighters’ Relief and Retirement Fund (HFRRF) has made a counter proposal, which would keep future firefighters in the current DB plan. The HFRRF says its proposal would save the plan $82 million over three years.
The mayor’s office and the HFRRF Board were to meet on Oct. 17, but the meeting was canceled. HFRRF Board Chairman Todd Clark has said that he expects the meeting to be rescheduled.
Almost 300 miles away in Fort Worth, that city’s Star Telegram reports that Forth Worth firefighters now have no pay and benefits contract with the city, since the most recent one expired on Sept. 30. It’s not that they haven’t been working on one — negotiations have gone on for more than two years. But there is a sticking point — the pension plan.
Agreement or no, the City Council is set to vote on a proposal that would change the way pension benefits are calculated for firefighters hired before Jan. 10, 2015. In determining a firefighter’s retirement pay, it would:
• reduce the multiplier used to calculate benefits from 3% to 2.5%;
• use the highest five years and not the highest three; and
• exclude overtime not built into their salary.
The Fort Worth Professional Firefighters seek a pension deal that would allow separating the firefighters’ pension fund from the Fort Worth Employees Retirement Fund, an arrangement that would allow them to increase their own contributions and maintain the current calculus for determining retirement benefits. The city opposes such a separation.
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