August 30, 2022 -- Today, the Court of Appeals for the First District of Texas reversed and rendered a decision in favor of the City of Houston against the Houston Firefighters' Relief and Retirement Fund (HFRRF).
HFRRF had challenged the constitutionality of a Texas statute designed to reform the City's firefighter pension system that ensures that the actuarial assumptions for determining the City's contribution rates are based on sound actuarial principles and establishes a process for setting the contribution rate when the City's and HFRRF's proposed contribution rates differ by more than two percentage points.
"The City of Houston has consistently maintained the constitutionality of the historic pension reform and welcomes the appeals court ruling," said Mayor Sylvester Turner. "The firefighters' pension is now 93 percent funded – compared to just 80 percent funded pre-pension reform – and is actuarially sound. It is important to note that the three pension systems – municipal, police, and fire – are healthier today because of the pension reform we have put in place."
The latest ruling is the second time the Court of Appeals has upheld the constitutionality of the statute reforming the firefighter pension system, making the pension system more secure for Houston's firefighters, both now and in the future.
The estimated unfunded pension liability reached as high as $8.2 billion before the 2017 reforms. Today, the unfunded liability of the City’s three pension plans is less than $1.5 billion.