The City of Houston today filed a lawsuit to obtain access to information the Houston Fire Fighters Relief and Retirement Fund (HFFRRF) refuses to provide. The lawsuit seeks data to allow the city to calculate the pension benefits that taxpayers will have to pay fire fighters covered by the HFFRRF over the next 30 years. The data being requested is available to the city under state law and needed to adequately budget for the future. It is the same information to which any private employer would have full access.
“We need access to this very basic information if we are to be able to protect taxpayers who foot the bills and the employees who deserve fair, financially secure retirements,” said Mayor Annise Parker. “I do not want a situation where we must choose between vital city services and paying retirement benefits. We have to be able to be able to accurately plan for the future. It is a critical piece in our long-term budget process. Since our repeated requests for the information have been turned down, we are left with no alternative other than relief in the court system.”
State law requires public retirement systems to undergo independent audits of their long-term predictions at least every five years. This audit is to be performed by an independent actuary (pension statistician) who has the credentials and is chosen by the governmental entity responsible for funding the pension systems. An audit was done in 2008 based only on the pension systems’ own publicly disclosed valuations. There has been no independent audit of the information underlying these valuations.
Additionally, the City needs information on how many employees of retirement age are utilizing the Deferred Retirement Option Program (DROP) that allows them to continue working and receiving a paycheck while also receiving pension benefits and a guaranteed investment return on those benefits. The pension systems do not notify the city when employees enter DROP. As a result, the City cannot adequately plan for the unpredictable, substantial increases in benefits that DROP often creates.
“HFFRRF’s refusal to provide this information is a refusal to allow independent verification of their numbers,” said Mayor Parker. “They want us to just trust them. When it comes to the use of taxpayer dollars, I am simply not willing to trust someone else’s numbers. We have to be able to verify.”
HFFRRF is controlled and administered by a separate, independent board/organization.