May 15, 2007
Mayor disputes pension story

Mayor White has a letter to the editor that strongly disputes the nature of yesterday's pension fund story. I'm reprinting it here for future reference:

The Chronicle's May 14 Page One headline that said that the city of Houston "can't keep its promise to the pension fund" was simply untrue. This administration has increased the city's contribution to the Municipal Pension Fund and made it more secure by reducing unfunded liabilities by about $1 billion.

Neither I nor anyone in my administration has ever stated that the city would pay the "statutory rate" for contributions to the Municipal Pension Fund.

In 2004, we defined annual contributions for three years and agreed to negotiate with the Municipal Pension System concerning our contribution thereafter. No other promise was made, and for years I have told all who would listen that the statutory rate is unrealistic.

The article's subheadline also was wrong in stating that I am citing "strained resources" as a reason for letting workers "contribute less, get fewer benefits."

To give our work force more options, our chief pension executive has proposed to allow workers to contribute more or less, and obtain more or less pension, depending on their personal choices about retirement planning.

In March, our finance director stated that we would budget the same percentage of payroll as we did last year -- this is not breaking news.

We have budgeted to pay 15.8 percent of municipal payroll into the pension fund, a higher contribution than the 14.5 percent rate which was the basis for enhanced pension benefits in 2001.

The Municipal Pension Board has the obligation to bring benefits in line with the costs, which they advertised in 2001.

I assure municipal employees that our city's contribution to the pension fund, including both cash contributions and the transfer of the Convention Center hotel, has increased pension security. We avoided massive layoffs or pay cuts to pay for the Pension Board's 2001 mistake or outright fraud. We are fully and deeply committed to the security of the pension system.

We have not broken any promise. We look forward to working with the municipal pension board to keep the city's contribution affordable and sustainable to make municipal pensions more secure and to give employees more options.

mayor, Houston

To which Matt Stiles responds:

First, I stand by the reporting in the story, and the mayor agrees with me on that. He might have a beef with the headlines, which I didn't write.

It's also true that the mayor and the fund worked together to reduce the unfunded liability. But it's been creeping back up, in part because the city, by agreement, hasn't paid the full contribution in recent years.

Paying the "statutory rate" might be unrealistic, but it's the law, at least according to the pension fund.

Finally, the city's position has been clear for weeks. But it's "breaking news" now because the budget is set for release. We hadn't reported it before because there are plenty of other stories breaking at City Hall, and I wanted to see what the negotiations would bring. As I've said, there haven't been any negotiations. That's newsworthy.

There'll be more from the pension director tomorrow. I want to see what's actually in the budget, because that's where the he-said/she-said will end and the real business will begin.

Posted by Charles Kuffner on May 15, 2007 to Local politics