HAS HOUSTON REALLY SOLVED ITS PENSION CRISIS?
SECOND IN A SERIES OF CRITICAL ISSUES: HAS HOUSTON REALLY SOLVED ITS PENSION CRISIS?
THURSDAY, DECEMBER 8, 2016
HOUSTON CITY CLUB (GREENWAY PLAZA)
The City of Houston has a serious pension problem involving the three employee pension systems, Police, Municipal Employees, and Firefighters. Depending on which figures you believe, the extent of the debt owed as a result of the City of Houston's unfunded pension obligations ranges from $5 BILLION to a maximum $13.7 BILLION. We simply have no money to continue to fund the generous retiree benefits approved by former Mayor Lee Brown's Administration in 2001, which accepted, without question, very flawed assumptions from actuarial firm, Towers Perrin. Ironically, that firm represented the Firefighters' Pension Fund but the City was unconcerned about the conflict.
To make matters worse, the State Legislature controls Houston's destiny by implementing a law that applies only to Houston, namely, that no changes can be made unless all sides agree to discuss. Worse, the annual contribution the city must pay is dictated by the Firefighters which was given effective control by the State Legislature in the same state Law.
How generous are the benefits under the current agreement?
A long-serving firefighter who retires this year will get a lump sum on retirement day approaching $ 1 million. A police officer will get a lump sum ranging from $1 million to $1.5 million. Plus, they get lifetime annual incomes with guaranteed future annual raises based on higher pay grades than at retirement. Contrast that generous retirement with the hard facts that many American companies are suspending pension plans, leaving loyal ex-employees with nothing. Yet, our civil servants will retire as millionaires while Houston scrambles to find the money to continue operations. Is a major tax increase coming in Mayor Turner's administration?
Our speakers, who will discuss the pending deal negotiated by Mayor Sylvester Turner last month and passed, upon submission and without discussion, by City Council, are three acknowledged experts in the field:
(1) Houston City Controller, Chris Brown, (2) Businessman, politician, attorney Bill King, and, (3) Craig Mason, acknowledged pension expert and retired actuary with 40 years’ experience who served several Mayors as the City representative on those pension boards.
PLEASE INVITE ALL YOUR FRIENDS WHO CARE ABOUT THE FISCAL FUTURE OF HOUSTON. RESERVATIONS REQUESTED AS WE EXPECT A FULL HOUSE. THE MEETING WILL BEGIN AT 11:45 A.M. AND END AT 1:15 P.M.
Chris B. Brown is a proud Houstonian who was sworn into office as City Controller in January 2016. Chris is a proven professional with the private and public sector experience to be a responsible financial steward, and the commitment to serve his community.
Chris began his career two decades ago, as a trader for Coastal Securities, an investment bank, where he focused on analysis of high tech stocks. After several years, Chris co-founded an equity trading firm. Chris, as head of operations for the equity trading firm, gained first-hand experience with risk management, compliance, reporting, building operations and negotiating complex agreements.
Prior to being elected Controller in December 2015, Chris served as Chief Deputy City Controller, where he managed the day-to-day operations and oversaw the Executive Division of the Controller’s Office. Prior to being appointed Chief Deputy City Controller in 2009, Chris served as City Council Chief of Staff, overseeing community development initiatives and serving as a liaison to the Budget and Fiscal Affairs Committee.
In addition to his professional experience, Chris is an active participant in his community. He currently serves on the board of the William A. Lawson Institute for Peace & Prosperity (WALIPP), Asia Society of Texas Advisory Board, Texan-French Alliance for the Arts, and Prevent Blindness of Texas. He is a past board member of the TCU National Alumni and SEARCH Homeless Services.
Chris is a fourth generation Houstonian, and has deep roots in the Houston community. Chris attended Briargrove Elementary and Lee High School, where he was a swim team varsity letterman. His family was a member of St. John's Episcopal Church. Chris attended Texas Christian University and obtained a Bachelor of Business Administration in Finance and later a Master in Business Administration from the University of Houston. Chris, his wife, Divya, an attorney, and their daughter, Milana, reside in southwest Houston.
A lifelong resident of the Houston area, Bill King grew up the son of a union pipefitter and worked his way through the University of Houston, earning both his bachelor's degree and law degree there. In so doing, he became the first in his family to graduate from college.
For the last 40 years, Bill has practiced law and run businesses in Houston. After "falling on my face" as he describes his experience during the economic downturn of the 1980s, he picked himself up, rebuilt his business career, and has gone on to serve his community in a variety of ways. In 2012, Bill co-chaired the HISD bond campaign to rebuild its dilapidated high schools throughout the city. The measure won nearly 70 percent voter approval. Prior to that, his efforts to revamp the region's hurricane preparedness plans earned him several gubernatorial appointments and other recognition.
More recently, as a columnist for the Houston Chronicle, and previously as a candidate for Mayor, Bill has earned a reputation as an outspoken advocate for balancing the city budget, investment in infrastructure, and common sense solutions to Houston's most challenging problems.
Mr. Mason was a management consultant for over 30 years with Mercer, the international human resource consulting firm. As a consultant, he provided advice to employers on the design, implementation, funding and administration of employee benefit plans, with a concentration on pension benefits.
After retirement from Mercer, he became an independent consultant. From October 2005 through August 2015 he provided consulting services exclusively to the City of Houston relative to the three pension plans sponsored by the City. As part of his consulting services to the City of Houston, he served as a trustee on the administrative boards of all three of the City of Houston sponsored pension plans.
Mr. Mason graduated with a BA degree in mathematics from Texas Christian University. He was an Enrolled Actuary and Member of the American Academy of Actuaries during his consulting career with Mercer.