After a bloody legislative battle resulting in passage of a pension reform bill that Houston firefighters staunchly oppose, the union representing the firefighters lodged a lawsuit against the City of Houston.

Negotiations broke down between the city and the firefighters at the height of the legislative session, and it seemed that there was little hope for reconciliation between the two groups. Dueling press releases, legislative jabs, and a lot of lobbying led to Mayor Sylvester Turner’s plan passing with large support, but the firefighters vowing to challenge it.

Their suit questions the constitutionality of plan provisions that “purport to legalize the City’s underfunding of HFRRF.”

HFRRF is the Houston Firefighters’ Relief and Retirement Fund.

A press release accompanying the suit said, “The bill, which was crafted by the City of Houston, directs HFRRF to use particular fundamental financial assumptions.  HFRRF’s Board maintains in the suit that it has sole constitutional discretion over determining actuarial assumptions for the Fund moving forward.”

“The lawsuit goes on to detail how SB 2190, in clear violation of the State Constitution, sets an assumed rate of return and purports to grant authority in part to the City and the City’s actuary to determine other actuarial assumptions, including future assumed rates of return. These determinations are central to pension fund management and belong solely to the HFRRF Board of Trustees.”

The bill is set to take effect on July 1, 2017, the same day as the city’s budget. That means in order to halt these changes, HFRRF would need a favorable judgment before then.

Charles Blain

Charles Blain is the president of Urban Reform and Urban Reform Institute. A native of New Jersey, he is based in Houston and writes on municipal finance and other urban issues.

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