from David L. Keller, Jr., Chairman, HFRRF Board of Trustees
Dear Members:
In recent days, Mayor Sylvester Turner effectively has instructed city staff to end discussions with the Houston Firefighters Relief and Retirement Fund. After more than 30 formal meetings with the city, scores of emails and phone calls, countless legal and actuarial analyses, and dedicated nights, weekends and holidays working toward a solution, our Mayor, the former state legislator, has decided to use the insider’s game of the legislative process to pursue his own one-sided plan.
In light of the mayor’s disappointing decision and misleading public comments, I wanted to update you on where things stand and our own plan for protecting our pension system.
First you should know that we tried in earnest to achieve a reasonable deal for you, our members, with the city. We went into discussions fearing the Mayor would use our well-funded, well-managed system to pay for the other funds’ shortfalls and his other priorities. Our fears now seem well-founded.
As the process wore on we sensed that the other pension systems were getting information, deal language, and negotiations ahead of us. We were not included in the first rounds of discussions. The city returned our drafts slowly or incorrectly using ambiguous language, often with new features and provisions favorable to the city and needing new discussions. On several occasions, when we thought an agreement had been reached, the Mayor’s staff would introduce new items outside the original framework or other “non-negotiable” items. Every maneuver presented more evidence the city was not truly interested in reaching a reasonable deal with us. Looking back, we now believe the city purposefully dragged its feet to use the March 10 deadline for filing bills against us.
We mention all this background because the Mayor’s recent statements blame us for the current impasse. We view this as a clever attempt to justify to his former legislative colleagues why they should accept his plan despite our serious reservations and objections on points the city insists upon and will not discuss. The Mayor declared, in this week’s council meeting, that the plan he submitted for our fund is similar to one for the Houston Police Officer’s Pension System (HPOPS) — we do not know what his plan is exactly because he has not shared it with us. Effectively introducing a parity in pensions while there has been no parity in pay for nearly two decades is fundamentally unfair. If the Mayor’s plan for us is the version we last saw or worse, we will absolutely oppose it. It was punitive and failed to reflect the HFFRF’s strong financial position relative to the other systems.
Since our inception 80 years ago, HFRRF has made sound financial decisions and earned solid returns to ensure your benefits are here now and throughout retirement. The money which the city owes the firefighters’ pension is less than one-fifth its overall obligation to all Houston pension systems. The Mayor and city staff have ignored the inconvenient fact that firefighters have opted for more in deferred compensation of retirement benefits than current salary.
In coming weeks we will be addressing this situation and will advise you when events in Austin warrant further update. We have many options as to how we will inform legislators about our concerns and the unfolding situation. We refuse to sit idly by while attempts are made to bulldoze us. We will protect our pension system – the best funded among all Texas pension systems with more than $1 billion in assets – so that you do not suffer for the city’s track record of fiscal mismanagement. We did not dig their holes. We should not be forced to fill them with our retirement funds. While we never expected nor advocated for the status quo and still do not, we are 100{997ab4c1e65fa660c64e6dfea23d436a73c89d6254ad3ae72f887cf583448986} committed to protecting the retirement security of our members. Unfortunately, the city’s priorities do not align with ours. While we have been and remain willing to work with the Mayor to reach amicable language to present to the legislature jointly that would result in adjustments to the Houston Firefighters’ Relief and Retirement Fund’s statute, it does not appear that the Mayor shares this willingness.
Sincerely,
David L. Keller, Jr.
Chairman, HFRRF Board of Trustees
Dear Mr. Keller,
Your service to your community is appreciated but make no mistake, the 92{997ab4c1e65fa660c64e6dfea23d436a73c89d6254ad3ae72f887cf583448986} of Texans that don’t live inside the city of Houston have no stake in your desire to become millionaires. Throughout the entire year of 2015, every one of your candidates for mayor made it clear that cuts had to be made, including the one your organizations supported with large donations who won. You should be thankful he isn’t offering to cut future benefits as much as most voters would like, perhaps you would like to let them decide how much you should make in retirement with a vote.
By your own admission you have met with the mayor and his representatives many times, otherwise communicating many more, and reportedly still refuse to provide requested data. Mr. King and Mr. Bettencourt have joined others to make suggestions on offering you a fair compromise but let’s not confuse the issues confronting Houston residents. Your retirees make 80{997ab4c1e65fa660c64e6dfea23d436a73c89d6254ad3ae72f887cf583448986} of their highest pay periods as well as get subsidized insurance and a large check exceeding a million dollars in many cases. Mr. King was gracious enough to provide documentation from your own pension reports to prove this, further showing how many tens of millions you lost in the last few years due to poor market returns.
In contrast, most city workers get a small percentage of what you receive in pension perks, even the police recognizing the need for additional cuts while they make 45{997ab4c1e65fa660c64e6dfea23d436a73c89d6254ad3ae72f887cf583448986} pensions that do not include many aspects your people do. The majority of officers no longer get that big check your team obsesses about, the benefit ended in 2004 according to Mr. King and a side by side comparison shows all three pension funds made similar returns on investment, the difference was that your pension was able to demand full funding each year.
, So while I’m sure you feel like your paychecks are smaller than you deserve consider how most firemen in the area are volunteers or make much less pay than you, the best comparison point being other local fire departments, not liberal enclaves like Austin or cities outside the state. According to your mayor, your benefits will still exceed those of all other city employees after the cuts are made but as a resident of the rest of the state, let me assure you that we just don’t care to have the legislature tied up for weeks at a time cleaning up your mess when there are more pressing concerns. If your true goal is to make your retirement secure, I suggest you accept the cuts offered and move forward before the rest of the state finds out just how much you are trying to keep while the city falls apart.
Sincerely, Not A Houston Resident
PS: Thank you to Mr. William King and Senator Paul Bettencourt for illuminating a group of us recently, the facts are powerful reminders why better fiscal stewardship is needed in the city as well as at the state level.
Any pension plan that assumes an annual rate of return in excess of 8 percent per year is a ticking time bomb for taxpayers. With central bank market manipulation, the potential for future shortfalls (i.e. unfunded pension obligations) rises exponentially higher, yet somehow people keep deluding themselves that the well will never run dry. “This time is different” they say. Only it’s not, and never will be.
I guess the HFRRF board wants to go the way of the Dallas police and fire pension fund, and have their fate dictated to them at a later date?
Debt (and yes, that includes pensions that were over-promised based on faulty assumptions) that can’t be paid, won’t be paid.
Give the 40,000 to 50,000 people that are impacted by the pension decisions since 2003 what is available to them. Let the other 2.05 million of us get along with getting this city back on track with its finances.
You lobbied hard for the promises your endorsed candidates for mayor gave you. You got what you wanted. Promises. From politicians.
We are a city, not a pension obligation.
Ms. Parsons, my email is [email protected]
I’d really like to set straight some misconceptions.
Thanks.
Dear Mr. Rhem,
While I’m flattered that you have singled my response out of all the others, if you have misconceptions to set straight, by all means do so here so that everyone will benefit from your personal experience as a fireman. The main point I was making was how most Texans are not interested in city of Houston pensions, though many of us are interested in the issue as it impacts the entire state of Texas. At the moment, your pensions are set to absorb a great deal of legislative time best spent elsewhere with that extensive piece of legislation filed this week, but they do not matter to most Texans.
Having read enough to have a good idea what the core arguments are in favor or in opposition to potential pension cuts, you’re really going to have to come up with something better than your union or pension leaders to impress me, or most of those that are regulars on this website. Pay comparisons to cities outside the state or hundreds of miles from here will not cause me to waver, nor will cherry picked statistics of questionable origin. So go ahead and make your best argument right here where it can be vetted by others with more knowledge on the specifics than I have or read by some of the state legislators that visit the website.
Bumping thread to remind Mr. Rhem where he commented on March 10.
See it now. I think you’ll see our back and forth on other threads will suffice.