Houston Mayor Sylvester Turner announces 'historic' pension reform plan

HOUSTON (KTRK) -- Houstonians rely on city employees to fix our streets, fight fires, and keep us safe. When they retire, employees get a pension. However, those pension systems have been underfunded for years.

"The current system is not sustainable, and I have 22,000-plus employees, the current system is not in their best interest," said Mayor Sylvester Turner during an afternoon press conference.

In a significant development of the decade-long effort to rein in the pension system, Mayor Turner announced he has reached an agreement in principle with two of the three major unions in the city. Turner says he can close the multi-billion dollar gap with a complex plan that includes changes in employee pension benefits and the sale of a billion dollars in pension bonds. The multi-tiered restructuring has been conceptually agreed to by city and police pension boards, but not the firefighters' board.

"This is my package I am proposing, and based on my conversations of all the different groups in the last seven months, it is the best interest not just employees, but it is the best interest of the city of Houston."

The firefighters' pension board, long the hold out for reforms, is still unmoved. In a letter to its members, Chair David Keller said in part: "...we are not comfortable portraying to the membership or the public that we have reached a deal. However, we have not walked away from the table. "

Firefighters may get dragged along in the reform anyway. State Rep. Jim Murphy, who has filed pension reform bills during the two previous legislative sessions, is prepared to do so again. This time, he is doing so with a mayor who spent 26 years in the Texas Legislature. It is widely expected that Turner will have better luck convincing his former colleagues to vote for pension reform.

"You know it's hard to say what's going to happen to that," said Murphy. "I think the other employee groups will help convince them (firefighters) to do it, because it's in their interest, all three of them, to try help the city."

We don't yet have the specifics of just how much less money retirees will receive, or other benefit changes that would come with pension reform. Turner says specific changes will be made by each individual pension board, but he made it clear, change is coming.

"Would I prefer all of us to be standing here today to make it perfect, yes, but at some point in time, the train has to leave the station. The train is leaving the station, but I will always pause to take on additional passengers," Turner added.