Mayor's Office

Press Release

Mayor Parker Unveils Fiscally Responsible Firefighter Pension Plan




August 21, 2014 -- In a bold and visionary move, Mayor Annise Parker today put forth a new pension plan for incoming fire cadets.  The proposed Houston 2014 Firefighter Pension Plan (HFFPP) is a defined benefit plan.  However, unlike the existing Houston Firefighters Relief and Retirement Fund (HFRRF), which by state law is managed and controlled by HFRRF beneficiaries, the new plan and its contribution scheme have been designed with city input and the plan will be managed by the city.    HFRRF will remain in place for firefighters who are already working for the city.


“I have said from the beginning that I am committed to maintaining defined benefit plans for our City employees, but I also strongly believe that the taxpayers who have to pay the bills deserve to have a say in what those plans look like and how much they cost,” said Mayor Parker.  “This provides the local control we have been seeking and puts in place a plan that will, over time, achieve parity among our public safety employee pensions and help the city meet its employee pension obligations.”


The new plan prepared by pension specialists at the law firm of Norton Rose Fulbright has lower long-term costs than the existing firefighter pension plan, with estimated savings of $110 million over the next 20 years.  It incorporates industry best practices and is similar to the existing Houston Municipal Employees Pension System and Houston Police Officers Pension System for new employees, except there are no guaranteed annual cost of living increases.  Other key components of the plan are:


Pension formula allows for retirement benefits up to 80% of base pay


  • Retirement no earlier than age 55 and with at least 10 years of service
  • Retirement benefits calculated based on the employee’s highest consecutive 78-periods of base pay
  • Required employee contributions of nine percent of base pay or one-third of the total actuarially determined contribution rate, whichever is greater
  • Maximum lump sum payout of 20 percent of a member’s annuity
  • Survivor annuity for spouse and eligible children
  • Supplemental annuity of $150 per month
  • On duty death benefit equal to 100 percent of base pay


The HFFPP would be governed by a five member appointed committee comprised of a senior City finance department employee, a senior City human resources department employee, a firefighter appointee, an independent mayoral appointee and an independent appointee of the city controller.  The committee will be responsible for all management aspects of the plan.  Plan assets will be invested and held by an independent institutional trustee.


It is anticipated that within 20 years, 70 percent of City firefighters would be covered by the new plan.  The savings that are generated as a result of the new plan can be used to reduce the unfunded liability in the existing fire pension plan, which is expected to increase from $533 million to $688 million by 2034. 


The Texas Constitution grants the City the legal authority to create the proposed new plan.