Representatives of the City of Houston and the Houston Municipal Employees Pension System have reached a tentative agreement on a plan to strengthen the pension system and continue to cut its unfunded liability.
Current employees will retain all of the benefits they have earned.
“The municipal employees’ pension plan is healthier and more secure than it has been in years, as are the pension plans for Police and Fire,” said Mayor Bill White. “Since 2004 we have cut the unfunded liability in half. This agreement continues that type of real progress.”
The agreement will mean no change in benefits for current City employees and will maintain the fiscal discipline in the newly adopted Fiscal Year 2008 budget. New hires who join the City workforce after January 2008 will have more options to choose from in how to structure their pensions.
The plan must be approved by the Pension System Board, which is scheduled to meet today, and the Houston City Council.
Under the four year agreement, the City would contribute $75 million to the
System during FY ’08, which is already contained in the newly adopted budget. The City’s contribution would rise to $78.5 million in FY 2009, to $83.5 million in Fiscal 2010 and to $88.5 million in fiscal 2011.