Mayor's Office Press Release

Houston's Historic Pension Reform Bill Passes in The Texas House
Mayor Sylvester Turner: “They said it couldn’t be done. But in Houston, we always get it done.”

May 8, 2017 -- Today, the Texas House of Representatives approved Senate Bill 2190, the Houston Pension Solution, Monday on a 112-28 vote.

“Gridlock has been crushing the budget and the promise of Houston for too long,” said Houston Mayor Sylvester Turner. “Safety, security and responsibility; opportunity, diversity and equality: These fundamental Houston values are all at stake when our city cannot afford to provide the most basic services to all its people.”

No pension reform bill for Houston has passed either chamber in more than 16 years. The Texas Senate passed the bill Monday, May 1. The bill will go before the House again for a third reading. It will then go to a conference committee for some clean up, and then again for a vote of both full chambers.

“They said it couldn’t be done,” said Mayor Turner. “But in Houston, we always get it done.”

"I'd like to thank Chairman Dan Flynn for his excellent stewardship of this bill," the Mayor continued. "Thank you to the leadership, those in the Houston delegation and Speaker Straus for working with us in helping put our fiscal house in order."

The Houston Pension Solution, which experts have called a "national model," will immediately reduce the City’s $8.2 billion unfunded liability through future benefit reductions. Under the plan, which utilizes a more realistic 7 percent rate of return on investments, the City will be required to meet its annual contribution until the unfunded liability is fully paid off in 30 years.

An innovative cost corridor concept controls costs for the City. The corridor serves a risk sharing mechanism; If investments perform too far below established levels, the pension boards will cut benefits or increase employee contributions to bring costs in line. Dr. Bill Fulton of the Kinder Institute for Urban Studies at Rice University said the corridor makes the Houston plan a "national model."

"This bill is the product of negotiation and shared sacrifice," said Mayor Turner. "It has the support of Houston police, Houston municipal employees, the Greater Houston Partnership and Houston City Council. It allows us to keep our promise to first responders, city employees and taxpayers."

“The bill is a good first step that will place the pension plans and the city on firmer financial footing and accomplish key principles of responsible pension reform,” said Josh B. McGee, chair of the Texas Pension Review Board and a vice president at the Laura and John Arnold Foundation.

Ray Hunt, president of the Houston Police Officers Union, said, “Houston’s first responders are proud to do their part in making pension reform a reality in Houston. Let’s get this done.”

The Texas Senate passed Senate Bill 2190 Monday with a 25-5 vote. Having passed both chambers with more than two thirds of the vote, the new law will take effect July 1, pending the Governor's signature.

“Today is a big day for Houston. But the work of reform has only begun,” continued the Mayor. “We need to close a significant budget gap this year, continue to find more efficiencies in the way our government operates and, importantly, lift the revenue cap so that we can lift up our families, lift up our neighborhoods and lift up our city.”