Houston Firefighters’ Relief and Retirement Fund

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HFRRF News                              

Houston’s  Firefighters’ Pension Fund Board Confirms Leadership; David Keller re selected  as Chairman 

HOUSTON (January 31, 2018) – The Board of Trustees for the Houston Firefighters’ Relief and Retirement Fund reselected David Keller by unanimous consent to serve as Chairman, a position he has held since  August 2016 to replace retiring chairman Todd E. Clark. The Board also unanimously affirmed Stephen Whitehead to continue as Vice Chairman and Francis “Frank” Maher as Secretary.  

Keller was first elected to the board in January 2014. He has chaired the Pension Benefits, Investments, and Budget and Audit Committees. He will chair the Legislative Committee in 2018. Since his election to the board, HFRRF has grown to $4.2 billion in total assets and investment management fees have been reduced $6 million annually. The pension system has focused on a number of internal changes for streamlining duties and responsibilities among staff. Keller chaired the subcommittee to find and hire Chief Investment Officer Ajit Singh. Under Singh, the system earned $439 million in its 2017 fiscal year, achieved a 12 percent return on investable assets, and exceeded $4 billion for the first time in the Fund’s 80-year history. During Keller’s term as Chair the pension fund also has seen two major lawsuits resolve in its favor. Both suits threatened the ability of the Board to administer the firefighters’ retirement system.

In other moves, the HFRRF Board in December appointed retired firefighter Lisa Slagle to serve a two-year term as its citizen member, replacing former Houston city council member Carroll G. Robinson. Slagle was recognized for taking an active role for HFRRF in the 2017 legislative session. Earlier in 2017, the positions held by trustees Whitehead and Garry W. Blackmon went uncontested in their 2017 election by pension fund members. Each will serve another three-year term through December 31, 2020.

“It is a great honor to serve another term as chairman of our board,” David Keller said. “Adding it all together, it’s easy to see that HFRRF has a conservative leadership structure in place. Stability, with an eye toward continuous improvement, is every board’s goal. We certainly see that dynamic in place and we believe it is serving the best interests of our members. Recent results confirm our success.”

About the Houston Firefighters’ Relief and Retirement Fund (HFRRF)

            HFRRF’s mission is to provide a secure retirement benefit plan for members through professional administration, prudent management of system assets, sound investment practices, and prompt and courteous delivery of accurate benefits and useful information to members. The Fund serves 7,275 active and retired members and has approximately $4.2 billion in net assets.  The American Investment Council Named HFRRF number five of the Top 10 Pension Funds by Private Equity Returns.

HOUSTON (June 30, 2017)

Dear Members:

Today, the judge ruled on our lawsuit with the City regarding the constitutionality of SB2190.  The judge ruled against our request for a temporary injunction and further ruled to dismiss the entire case .

Obviously, we are disappointed with these rulings.  The Board will discuss our options with our legal team and then make a decision as to our future efforts.

Faithfully Yours, 

David L. Keller

May 10, 2017

News for Immediate Release

Houston Firefighters’ Pension Fund Questions Mayor’s Claims on Data

HOUSTON (May 10, 2017) – The Chairman of the Houston Firefighters’ Relief and Retirement Fund questioned City Hall’s near instantaneous analysis of a legislative amendment passed Monday even while saying it doesn’t have enough data from the pension fund to verify previous proposals.

Board Chair David Keller noted how the City – within hours of the House’s passage Monday of Representative Dwayne Bohac’s amendment preserving retired firefighter’s benefits – could calculate a $400 million impact on the total pension reduction package. Mayor Sylvester Turner then called on the Senate and House Conference committee to strip that amendment.

“How is it the City was able to come up with such a quick determination?,” Keller asked. “This proves our long-held view that the City has all the data it needs from its own payroll records and our published benefits’ formulas to make its own calculations and verify our previous proposals.”

Keller recognized firefighters’ appreciation for Representative Dan Huberty’s amendment to strip the Mayor’s bill of $200 million in punitive cuts if the pension fund provides the confidential individual level data.

“The City has been holding this pretended data verification issue over our heads for years now and used it to justify about $200 million in punitive cuts above and beyond our framework agreements in October,” Keller said. “The City has had, and even has now, a licensing agreement on its desk which would protect individuals’ rights under law for the individual level data in question.   Even if Representative Huberty’s amendment were read as requiring the City to accept our data-proven cost savings with less drastic and punitive benefit cuts, the City might well dismiss our showings without providing a reason.  The City would then stand to unfairly collect $200 million of firefighter benefits. Not much of a square deal.”

Keller concluded by saying “This data issue has been a smokescreen from the get-go. We appreciate the Legislature’s attempt to push through the smoke coming from City Hall.”

BACKGROUND  

• In its 2016 framework discussions with the City of Houston, HFRRF and the City discussed benefits adjustments. The City said it needed firefighters’ personal account records to verify that the adjustments could achieve the City’s demanded financial targets. 
• HFRRF first offered proposed solutions to the City with little response. It then offered to license the information to the City’s actuary, under a consensus that only the City’s actuary needed to view the raw member data. After months of negotiating on information and inquiring whether the City’s actuary should be present, the City stepped away and turned negotiations over to its actuary, which wanted to start negotiations over.  
• The City Attorney incorrectly informed City Council that HFRRF was demanding an indemnity provision from the City’s actuary, which is wholly absent from the proposed agreement.   
• The true sticking point has been the City actuary’s insistence that it be able to use the information for any purpose its client desired and not just to comply with the new statutory provisions. 
• The City’s actuary still has the license agreement on its desk available today for signature according to term sheet which was agreed to in October by HFRRF and the City. The City’s actuary could secure data today for verification to its client, the City.  
• As an aside, the City reportedly used HMEPS-supplied data and agreed on incorporating benefit changes without any of the verification concerns it has placed on HFRRF.   This was confirmed in a meeting with the City’s team. 

May 10, 2017 - Message from the Chair

Dear Members:

Today we find ourselves in the eye of a storm we did not create. The storm surge has passed. The back half will be coming at us fast and furious in these final days of May. Do not lose your nerve!  

First let me tell you how proud it made me to see all of you in red, first on Saturday and then again on Monday. You certainly answered the call. In defiance of insurmountable odds, you went to Austin, moved the debate, and changed the game.

You saw Representative Huberty courageously defy the Mayor and House Pensions Committee Chairman Dan Flynn after recognizing how punitive the bill is to Houston Firefighters. His efforts on your behalf emboldened his colleagues to vote overwhelmingly in your favor.

That vote was important for another reason. It signaled House Members' willingness to reject the City's narrative that the bill is fair and inevitable. It's just not true. Then Representative Schofield stood up for you and worked to fix another unfair piece of the legislation. By this time, the bill's author realized he did not have the votes and had to accept additional amendments. He didn't want another lopsided vote showing more disapproval of the Mayor's bill.

These dramatic turns didn't materialize out of thin air. They were the result of months of your hard work and direct involvement with the process. Phone calls, office visits and attendance at the House sessions turned the tide. You were the key.

Which brings me to my final point: from the beginning the Mayor and City Hall have employed an all-or-nothing, divide-and-conquer strategy against us. We were set apart from their first discussions with the police and municipal employees' pension funds. 

We should not have been set apart from our fellow city workers. When firefighters need police in the streets, we are always glad to see them arrive. When police need firefighters in the streets, they are always glad to see us arrive. We are not enemies.

We should not allow City politics to drive a wedge between us. It doesn't serve the interests of our city. 

And now this divide-and-conquer strategy is being used to pit active against retired firefighters when we have always benefited from our solidarity. 

We cannot be divided. God willing, we will all be retirees someday. For many of us, these are our Dads and Grandpas. They are watching their sons and grandsons being turned against them, all because we have had to fight hard to preserve what was promised to us and is now being taken from us. We cannot let this happen.

SB 2190 has passed through the Senate and House. It now goes to a Conference Committee. The Mayor has stated that the amendments will get stripped out of the bill in conference. Those amendments help give us some semblance of fairness.    

Those Representatives who took a stand for firefighters made a bad deal better.    

We all need to let those Members of the Legislature know that we appreciate their support and we need to remind them yet again of why we are asking them to stand with us one more time   

Our pension fund's unfunded liability is only 18% of the City's total obligation. The City can achieve 82% of what it wants to achieve with the other pension funds without involving us at all, through meet-and-confer processes. Remind them of this escape route. 

Please don't give up!

Faithfully submitted,

David L. Keller, Jr.
Chair, Houston Firefighters' Relief and Retirement Fund Board of Trustees 

April 21, 2017

Call to Action

Yesterday, the vote on Senate Bill 2190 sponsored by Senator Joan Huffman was delayed until next Monday, April 24, 2017.  I recognize this is a last-minute request, but Brothers and Sisters, I need your help at the Capitol in Austin on Monday!  Drive, fly or walk, but get there.  There will be no formal gathering, so you’ll be working independently.  We do not know the exact time that the Senate will take up her bill, but the Senate is scheduled to go into session at 2 p.m.

Here is what I need each of you to do: 

• Get to the Capitol on Monday morning and go visit your Senator’s office and tell them you are a constituent and you want your Senator to oppose SB2190.
• Then, go by Representative Todd Hunter’s office (1W.11) or the Calendars Committee office (E2.148) and fill out a “Red Card” indicating you are opposed to HB43.
• Then, go to your Representative’s office and tell them you are a constituent and you want your representative to oppose HB43 should it come to the floor.
• Then, go to as many other members of the Senate as you can (minimum of 5) and tell them you are opposed to SB2190 and request that they vote no on that bill.
• Lastly, go to the following Calendars Committee member’s offices and tell them that you are opposed to HB43 and request that they not vote HB43 out of the Calendars Committee.
  • Rep. Donna Howard (E1.504)
  • Rep. Roberto Alonzo (1N.12)
  • Rep. Trent Ashby (E2.414)
  • Rep. Byron Cook (GW.7)
  • Rep. Sarah Davis (GW.4)
  • Rep. Charlie Geren (GW.15)
  • Rep. Helen Giddings (GW.11)
  • Rep. Kyle Kacal (E2.412)
  • Rep. Ken King (E2.410)
  • Rep. Linda Koop (E1.406)
  • Rep. Poncho Nevarez (E1.508)
  • Rep. Chris Paddie (E2.502)
  • Rep. Dade Phelan (E1.324)
  • Rep. Toni Rose (E2.310)
   

Once again, it is important for you to make the effort to get to Austin on Monday.  See you there! 

Faithfully yours,

David Keller
Chair, Houston Firefighters’ Relief and Retirement Fund Board of Trustees

April 13, 2017

Update to My Fellow Firefighters on Pension “Reform” Developments

There’s been so much going on in Austin that it is hard for me to find a starting place. So let me start with you and I’ll ramble on from there.

I have never been so proud as a firefighter than on March 27 when hundreds of you showed up in Austin to testify on House Bill 43. Everyone was so polite, well informed and eloquent in their comments to the House Pensions Committee. It’s hard to imagine how the bill could ever have been reported favorably out of committee. You did your job and you did it well.

But now you know what we’ve been up against: a full-blown effort by the City to make firefighters fill a pension hole we didn’t dig. The City has been pursuing that course because we have money. We’re the best funded pension system in the state when compared to other plans with more than $1 billion in assets. The City has needed its ‘fix’ to come from somewhere. The City’s obligation to your pension is only 18% of the total owed to all three systems, but the City has been asking HFRRF to take on 35-40% of the total cuts. Again, the money had to come from somewhere. Talk about punishing success.

And that’s why I’ve been spending so much time in Austin, telling lawmakers your stories. It’s been hard because the truth has been twisted in so many ways. Take for example this baloney about our Board approving the City’s draconian cuts in October. Nothing is further from the truth. Our Board voted in October to continue discussions in hope of reaching mutually agreed upon legislative language. In every subsequent meeting those terms were altered or more were introduced. How do you agree in October to one thing and then get entirely differently terms in March? Well, that’s exactly what happens when you deal with the City.

Thankfully, with your help, we helped lawmakers understand this dynamic. The simple fact that Senator Huffman was working with us so diligently in the last two weeks on Senate Bill 2190, even while you were testifying in the House, reflected that at least one lawmaker understood what had happened. We hope you do also.

Today’s media barrage is more of the same. Lawmakers are being pressured by Moody’s saying that Houston bonds will be downgraded if a draconian bill with big cuts to firefighters’ pensions doesn’t pass. Baloney. Houston’s other two systems can fix their problems through the meet and confer process already available to the City. And the City doesn’t need a vote to issue $1 billion in pension obligation bonds those other systems want. They can do it tomorrow (kind of). We’ve stayed out of that mess because, again, we’re one of the best pension funds in Texas.

So where are we going? It will be more of the same for the near future. Back and forth to Austin. Back and forth with lawmakers. We remain OPPOSED to the two bills, SB 2190 and HB 43 because they put too much burden on you. We oppose them because this ballyhooed corridor mechanism is probably unconstitutional, taking control of actuarial assumptions away from our Board. We think that’s wrong and the Texas Constitution does as well.

Please keep contacting your representatives and your brother and sister firefighters in other parts of the state. We’re not going to let up on pressuring lawmakers to realize the City of Houston has all it needs to fix its problems without deep cuts to firefighters’ pensions. Be there with us.

Faithfully submitted,

David Keller
Chair

Houston Firefighters’ Relief and Retirement Fund
Board of Trustees

March 28, 2017 - Update

Dear Fund Members:   

Please be advised that the Fund is continuing discussions with Senator Joan Huffman regarding her bill, CSSB2190. Therefore the meeting scheduled for tomorrow, Wednesday, March 29, has been cancelled.   

We will continue to keep you updated of any new developments.    

Sincerely,

David L. Keller, Jr., Chairman, Houston Firefighters' Relief and Retirement Fund 

March 24, 2017 - HB 43 Hearing Monday, 

March 27, 2017

For those interested in going to HB 43 Hearing in Austin on Monday, March 27^th, 2017, the hearing starts at 2 pm in E2.012 Floor 1 East side

Click Here for the schedule.

Click Here for a map of the Capital.

Click Here for instruction on how to register and testify at the hearing.

March 23, 2017 - Update

This has already been a contentious legislative session and I do not see that changing anytime soon.  Things are moving at a rocket pace and we have very little time to act whenever we discover new information. The whipsaw that we are experiencing makes it difficult to keep you up-to-speed on what is going on at any given time, which is regrettable but there is no way around it.

In the Capitol, earlier this week, we learned about some statements made to our members that were either based on misunderstandings or downright false.  Your Board, the Chair, Fund Staff, and our governmental relations resources have been in constant contact with lawmakers. We have visited in person, by telephone, and over email. We have had a great deal of contact with Chairman Flynn's office including visits with the Chairman.  We have also had a great deal of interaction with Senator Huffman's office.  These are the sponsors of bills that would change your pension.  We are currently involved in discussions regarding the bill that was voted out of the State Affairs Committee this past Monday and the House Bill Committee Substitute we expect to be heard on Monday next week.

As a call to action:

The membership has two options at this point: you can get involved or you can watch this happen and then complain to each other on Facebook. You each have a State Senator and a State Representative.  Find out who these people are and contact them by phone, letter, and email.  You should know who they are because you voted for them. If you don't, you can Google it just like you would if you needed a new garage door. Don't wait on someone else to tell you who it is or what to say.  Firefighters are smart, resourceful, and adaptive.  You have a lot to say about what you think the Board is and isn't doing. Redirect that to the lawmakers where a difference can be made.  You each have a story and motivations for being a firefighter.  You also have an expectation of what your promise was and what you expected the City to do in return.  This is what you need to share.  If we are not successful in making this change in an amicable way, do not complain if you didn't exhaust your own efforts. The Board cannot do what this membership can do!  It is going to take a tremendous amount of effort.  Turn down overtime, set aside your side job, tell your family you’re going to be in Austin on Monday and let the lawmakers know where you stand. Or be a Facebook warrior and watch the City take your benefits to fill its budget gaps right before your very eyes. The choice is yours.

Faithfully yours,

David Keller, Chairman, HFRRF Board of Trustees

March 20, 2017 - Senate Bill 2190

Today, the Senate State Affairs Committee after hearing testimony on a bill substitute for SB2190 by Senator Joan Huffman, passed the substitute out of committee to the full Senate. 

Click Here to view a copy of the bill substitute. 

The bill may be heard by the full Senate at some time in the very near future. 

Faithfully yours, 

David Keller, Chairman, HFRRF Board of Trustees

March 17, 2017 - Attention All Members

High Priority!

Senate bill 2190, by Senator Joan Huffman of Houston, is scheduled to be heard by the Senate State Affairs Committee on Monday, March 20, 2017 at 9 a.m. in the Senate Chamber at the Capital in Austin. This bill, as introduced, has dramatic effect on your pension. 

All members are strongly encouraged to attend this hearing.  While you must follow the HFD Uniform Guidelines, being identified as a Houston Firefighter (active or retired) is important.  Your opportunity to make comments to the committee will be at this hearing. 

Faithfully yours,

David Keller, Chariman, HFRRF Board of Trustees

Click Here to see Senate Bill 2190, pages 1 - 56 apply to the Fund. 

Click Here to read HFRRF View of City of Houston Pension Reform Proposal

February 24, 2017 - Update from HFRRF Chairman David Keller

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% 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

January 27, 2017 - HFRRF Chair Updates Pension Review Board

 Board of Trustees Chairman David Keller offered the Texas Pension Review Board comments Thursday on the status of discussions with the city of Houston. Keller followed a presentation by COH finance director Kelly Dowe. Keller reminded the PRB of HFRRF’s 80 year history of success in responding to economic and political events which required adjustments to the pension system. He noted how the pension fund and city have met 28 times since last year, involving thousands of hours of staff time, and that another meeting is scheduled next week. 

 Keller emphasized that portions of the city’s proposals are very complex and experimental and would defy simple explanation to plan participants. The PRB has previously expressed desire for simple plan documents. 

 Keller summarized by saying, “I think everyone who engaged in any sort of transaction agrees with the very basic idea that there is no deal until there is a deal. That’s where we are, but we are continuing to work together with the city toward appropriate adjustments.” 

 During Q&A, Keller bantered with PRB members about the possibility for the city ‘gaming’ the pension funds through its proposals, echoing other Houston pension funds’ concerns over enforcement mechanisms for a formula, called “the corridor”.  When PRB Chairman Josh McGee asked Keller for his position, Keller noted how Dowe had characterized enforcement as being no big deal and did not need to be addressed in a proposed bill.  Keller said, “If our concerns are no big deal, then it should be easy for them to include them.”

 January, 1, 2017-Update Regarding Discussions With The City 

The Board is still working earnestly and continuously with the Mayor and the Mayor’s team to reach an agreement on legislation to be jointly submitted to the legislature.

There are, however, a number of complicated issues to be worked out before it can be said that an agreement or “deal” is reached.  Also, the details of how seemingly agreed issues are to be appropriately drafted into bill language need to be worked out.

One of the problems the Board has faced is that our lead actuary of the last few years from Buck Consultants, who was working on calculations for discussions with the City of Houston, has recently been hired away by Retirement Horizons, Incorporated, the actuary for the City.   We are informed that he will not work on City of Houston matters at present.

A conditional framework had been accepted by the Board and the City to guide negotiations.  

 Some of the major issues that still require resolution are:

Providing member information to the City’s actuary, which is complicated by the pending City lawsuits against HFRRF and HFRRF’s former actuary.

A speedy and efficient payment enforcement process in view of the immunities that municipalities have with regard to paying out money.

Complications of the City’s proposed “risk sharing provision” discovered or introduced by the City after the initial non-binding framework was established. 

What happens if the City’s proposed “risk sharing provision” doesn’t work as intended; what funding mechanism will be supplied or retained to ensure the plan continues to be in excellent, well-funded shape.

Trying to better understand and get assurance of how the “risk sharing provision” can provide secure benefits, if the benefits are always subject to further cuts.

A request from the City to use a new actuarial assumption method for the purpose of near-term budget management.

The City has informed the Board’s working team, including the Board’s officers, that it knows of no bill language (other than the original so-called “place-holder” language), at the legislature including legislative bill drafters.    This is important because there is an understanding with the City that the City would not bring or discuss language with the legislature or legislative bill drafters except language that HFRRF had agreed to in writing.

Again, the possibility of there being a deal hinges on mutual solutions to these and other important issues. 

Houston Firefighters’ Relief and Retirement Fund's Private Equity Returns Again Rank in Top 10 Nationwide - American Investment Council Study

The proposed Terms and Conditions constitute a non-binding framework for drafting legislative language for a jointly proposed bill in the 85TH Texas legislature. The City has asserted that the current plan of firefighter retirement benefits has become burdensome on the taxpayers. The proposed provisions outlined in the “Pension Reform Proposal Terms and Conditions”, referenced above, are subject to a mutual agreement and resolution of legislative language between the Fund’s Board and the City. 

The focus of your Board of Trustees is our membership.  We recognize our fiduciary responsibility to advocate for our members at all times.  This is what we have done and will continue to do.  We have a desire to promote the health of our plan and ensure its sustainability.  We will continue to update you as additional information is available. 

Faithfully yours, 

David L. Keller, Jr., Chairman

 The focus of your Board of Trustees is our membership. We recognize our fiduciary responsibility to advocate for our members at all times. This is what we have done and will continue to do.

 Click here to view the video.

 Discussions on Plan Update from Chairman David L. Keller, Jr.

 Houston, TX – September 14, 2016: To the membership of the Houston Firefighters’ Relief and Retirement Fund, 

As you know, over the past many months, a team of Trustees from your Board have been meeting with Mayor Turner and/or his staff at the Mayor’s request to attempt to reach an agreement on adjustments to the HFRRF plan.  Although we have worked diligently on your behalf, we have not reached an agreement at this time.  We have discussed economic changes that would fit within the guidelines set forth by the Mayor. We have also presented issues that are important to us.  However, no resolution has been made.   

This has been a challenging process for numerous and various reasons along the way.  The HFRRF became the strongest of the three Houston pension funds and one of the most successful in the State by careful deliberation and due diligence.  We have been applying the same approach here.  Every adjustment proposed was considered based on the impact it would have on the various populations of the membership. 

We will not be in attendance today at the Mayor’s announcement because we are not comfortable portraying to the membership or the public that we have reached a deal. However, we have not walked away from the table.  We are open to continuing the discussion with Mayor Turner in an attempt to reach a mutual agreement. 

We began these discussions with the idea that it would be better to participate and shape reforms rather than have them imposed by the Legislature.  If we can resolve all of the issues required to reach an agreement with the Mayor and City, it will come with adjustments to DROP, cost of living adjustments, contributions, and the interest crediting rate.  As you probably expect, these are the targets of discussion regarding our plan.  The Mayor has committed publicly to a defined-benefit pension and the basic structure that is currently in place. 

We will continue to work under the premise that the benefits of the HFRRF are earned benefits by Houston Firefighters.  These benefits are part of the total compensation of our members.  We believe that retirement with CERTAINTY and DIGNITY are paramount. We believe that the whims of local politics and budget shortfalls not of our making should not dictate the certainty of a firefighter’s retirement. 

The focus of your Board of Trustees is our membership.  We recognize our fiduciary responsibility to advocate for our members at all times.  This is what we have done and will continue to do.  We have a desire to promote the health of our plan and ensure its sustainability.  We will continue to update you as additional information is available. 

Faithfully yours,
David L. Keller, Jr.
Chair

 City of Houston Loses on Appeal in Denied Bid to Have Its Firefighters’ Pension Statute Declared Unconstitutional

 Houston, TX – September 9, 2016:  The Houston Firefighters’ Relief and Retirement Fund (“the Fund”) won another major victory in defense of a City of Houston lawsuit.  The Texas Fourteenth Court of Appeals rejected the City’s petition to have the statute governing the firefighters’ pension declared unconstitutional.  The opinion found the district court's opinion in the Fund's favor to be correct on all grounds.  The law governing the Fund had been changed or updated over the years by the legislature, but has operated constitutionally for 79 years to provide retirement and disability benefits to Houston firefighters and their survivors.

"It appears that the lawsuit was without any basis to begin with and the City has wasted both City and Fund resources in a meritless lawsuit, which has been senselessly continued on appeal," observed David Keller, the Fund's Chairman.

The statutes that govern the Fund are thorough and reasonable, employing a sound formula that determines contributions and solid funding.  The Fund is one of the best funded public pension plans in the State of Texas. The City of Houston pays only about 20% of the cost of benefits going to retired firefighters with the remaining 80% or so coming from the Fund’s investments over the long term of the Fund's existence and the firefighters' own contributions to the Fund. 

The Fund was created by state statute, and since its founding in 1937, it has been administered by its Board of Trustees as provided in the statute.  This structure has kept the Fund's core stability safe from the ever-changing impulses of big city politics and spending.  Additionally, the Fund reports to the state Pension Review Board (PRB), an agency of the state of Texas, and the fund files copies of the actuarial valuations, appraisal reports, annual audits and performs all reporting required of it by the PRB.  The size of the Funds’ assets have grown over the years.  The market value of the Fund assets in 1988 was approximately $468 million, today its assets are approximately $3.84 billion.