Houston Mayor Announces Lawsuit Against Firefighters' Pension Over 'Unsustainable Benefits'
by: Laurie Johnson, January 22, 2014 3:01:00 pm
Houston Mayor Annise Parker announced the lawsuit against the Houston Firefighters Relief and Retirement Fund, even as the city and the separate Houston Firefighters Union are in collective bargaining over salaries and benefits.
Parker says the firefighters pension, which is separate from the police and municipal pensions, will financially cripple the city if the status quo is maintained.
"It is true that the firefighters pension is the best funded pension. It is untrue to say it is the healthiest pension."
Parker says the pension allows abuses such as spiking, which is a practice where retirees can collect pensions based on their single highest paycheck. She says many firefighters work extra overtime in the months leading up to their retirement in order to spike their pay.
"The city's lawsuit does not seek to change any benefits being paid to current firefighter retirees, nor would it have any impact on the other two pension systems. This follows our expressly stated desire to have the ability to directly negotiate with the firefighter pension."
According to the city finance director, a 30 year veteran of the fire department could retire with a lifetime monthly annuity of 94 percent of their pre-retirement salary. Firefighters are also allowed to enroll in a DROP plan, which grants them an additional lump sum payment if they continue working past eligible retirement age.
Parker says the average DROP payment is estimated at $850,000.
But the Houston Firefighters Union President Bryan Sky-Eagle says those numbers sound inflated.
"There's no firefighter that retires with that kind of thing. If I remember correctly, if you did 20 years you get 50 percent and if you do 30 years you get 80 percent. So where this 94 percent comes from, I don't know."
Sky-Eagle is quick to point out he has no connection to the pension board and does not have access to the pension's financials. But he takes the lawsuit personally.
"You know when I look at this, suing the firefighter pension to me is no different from suing firefighters. So I don't want to make any mistake where my position is, this is an attack on firefighters, no doubt."
But Parker frames it differently.
"Firefighting is a hard job. It wears on the men and women who do it and when they know it's time to go, they ought to have the right to leave and have a retirement with dignity. They don't have the right to break the bank."
Parker says she favors moving the city's pensions toward a defined contribution plan in which the city could match employee contributions two to one. Meanwhile, the city's lawsuit asks a state district court to grant negotiating authority back to the city.