City of Houston sues firefighter pension system

HOUSTON – The City of Houston filed a lawsuit Wednesday against the Houston Firefighters' Relief and Retirement Fund (HFRRF) in an effort to try to have both sides come to the table to get control of the current pension system.

The HFRRF is one of three pension systems covering City employees. 

According to Mayor Annise Parker's office, the lawsuit seeks to enable the City to have the same input on contributions and plan design for HFRRF that it already has with the Houston Police Officers Pension System (HPOPS) and the Houston Municipal Employee Pension System (HMEPS).

The lawsuit was filed by the City's Legal Department in the state district court of Harris County.

"State law that applies only to Houston is unreasonably restricting our ability to protect taxpayers and keep our commitment to secure and sustainable firefighter retirement benefits," said Mayor Annise Parker in a statement. "It is clear from the difficulties experienced by other cities that this is an issue that must be addressed.  We have to have the ability to negotiate these benefits at the local level and be able to verify the financial health of HFRRF.  We cannot and will not kick the can down the road."

Mayor Parker stressed the current plan is financially unsustainable for the city, and right now, there is not enough money going forward in the long-term.

The mayor's office says through the "meet and confer" process with HPOPS and HMEPS, the City is able to negotiate employee contributions, retirement ages and benefit levels for police and municipal retirees. In the past, these negotiations have resulted in agreements that have improved the city's ability to meet its long-term obligations for these two pension systems. Under existing state law, there is not a similar process available for the firefighter pension system. 

"Litigation is the only remaining option available to the City," said City Attorney David Feldman. "Instead of Houston determining, or even having a meaningful say about the level of its own contributions to HFRRF, that decision is being made by people likely to benefit from the decision.  The City is asking the court to declare unconstitutional the laws that allowed this.  The suit also seeks to end the practice of HFRRF using taxpayer money to lobby in favor of such laws."

According to the mayor's office, firefighters retiring with 30 years of service are currently eligible for an average initial monthly lifetime annuity of 94 percent of their average pre-retirement salary, plus an average estimate lump sum of approximately $850,000. Officials say the value of the average combined benefits for these retirees is estimated to be $1.6 million.

The City says this lawsuit would not have any impact on HPOPS or HMEPS, nor does not seek any change in benefits being paid to current firefighter retirees.