Ben Hall for Mayor of Houston | Issues | Reforming Our Pension System

Our City’s current pension equation is unsustainable. Without immediate attention and significant reform, pension obligations will become more crippling to the City’s fiscal health.

There is no silver bullet solution to Houston’s legacy pension obligations. There are, however, ways to reduce the risks and improve the City’s ability to address problems that have plagued us for over two decades.

As Mayor, I’ll take the following steps to better control the City’s pension challenges:

Immediately strengthen the City’s lobbying presence in Austin to work for needed statutory reform for increased local governance of the City’s pension obligations.
Through the present “meet and confer” process, I will propose a sensible approach to reshape and redefine pension offerings with reasonable city contributions. This is a necessary step to get control of our out-of-control spending.
We must recalibrate how we calculate actuarial liability. A better approach to consider is to tie projected pension benefits to actual market performance.
The City must begin serious consideration of insuring the second and third decades of projected actuarial liability instead of surrendering to present market investment strategies adopted by the pension boards. This would be a temporary measure to lessen the demands on revenue until we improve our present financial picture. The insurance approach is meaningful only if premium cost-reduction justifies the shift, which initial conversations suggest is possible.
Concentrate city government on core services – fire, police, infrastructure – instead of the 23-department behemoth we presently have. The cost savings from this will provide millions of dollars to address pension shortfalls.
The City must abandon the current single-highest-pay-period-method for calculating pension obligations.
Stop the practice of issuing debt to catch up on pension obligations. Using debt to pay debt is a destructive fiscal cycle that must end.
Understand that a single solution – such as a 401k, Defined Contribution, or ERISA Plan – will not suddenly resolve our legacy pension obligations. These approaches can have positive effects on new and current hires, but they will not address the significant obligations to which many employees are already entitled.
We must institute a disciplined, pragmatic, and multi-year approach to return our City to financial health. City employees are great assets, and a progressive and multifaceted partnership with citizens, businesses, legislators, and employees is needed to address the pension challenges we face.

On The Issues: Reforming Our Pension System