June 11, 2007
Pension still pending

Still waiting on a pension deal to be finalized.

The city's current funding arrangement with the Houston Municipal Employees Pension Fund, which must approve any benefit changes, expires July 1.

Without a new agreement, the city could be forced to pay millions more than White has planned in the proposed budget City Council is scheduled to approve this month.

The sides have met in recent weeks, but the time left to reach an agreement is running out.

"We've just waited and waited and waited until the last minute," said David Long, the fund's executive director, who has a strained relationship with city officials, especially White. "I'm not saying it can't be done. We will do everything in our power to get it done. But it certainly makes it difficult."

White's proposed benefit changes are designed to cut the pension's $1 billion unfunded liability over the next 30 years, thereby reducing the city's annual contribution to the system.

Without a deal, the city must pay $109 million in the fiscal year beginning July 1.

White says the city can afford only about $75 million, and layoffs would be necessary otherwise. The $34 million difference -- seemingly small in a $3.8 billion budget -- is roughly the same amount the city plans to spend on libraries next year. That amount also could pay for training hundreds of police cadets.

Administration officials say White's plan, which pension officials are analyzing now, would allow the city to maintain a more manageable annual payment and provide a competitive retirement package, while also helping secure the pension fund's long-term viability.

Negotiations began almost four weeks ago. This story strikes me as more of a checkup to see how things are going than a dire warning of an impending train wreck, but beyond that it's hard to say what's in the offing. Stay tuned.

Posted by Charles Kuffner on June 11, 2007 to Local politics