Realizing that many officers are anxious over what they have been hearing and reading in the media regarding the financial concerns with the City's pension systems, President Hans Marticiuc, issues memorandum to all officers.

TO:                   All HPD Officers

FROM:              Hans Marticiuc, President

REF:                 Proposition 15 Opt Out and Police Pension Positions

We realize that many of you are anxious over what you have been reading in the papers and other media outlets in reference to the problems with the city’s pension systems, primarily the municipal pension system which has been projected by the administration to be under funded by as much as $1.5 billion.

Additionally, city employees’ anxiety level has been elevated by the confusion surrounding why the Houston City Council approved sending the decision to opt out from under the provisions of Proposition 15 to the voters on May 15.  The purpose of Proposition 15 was to help employees in municipalities that did not have their pension and benefits codified in state statute like HPD officers have had since the Texas Legislature first enacted our pension plan in state statute 50-plus years ago. Therefore, the impact of Proposition 15 inclusion was much more meaningful for places like Fort Worth and others whose pension plans were created and controlled by local city councils.  That is why the issue of inclusion was not imperative for us back when the issue was being considered in the legislature and again when voters adopted it back in September 2003. 

It is important to note, we have been concerned that the effort to protect pension benefits that were not already protected in state statue like ours, would cause a number of people to start reviewing municipal pension benefits and possibly question a number of unexplainable provisions in other pension plans that would be problematic to the public.  Additionally, we were concerned that the problems with other pension plans that were also grouped under the Proposition 15 umbrella could possibly cause serious perceptional problems for all of us once they were recognized and discussed. Maybe this is why San Antonio PD as well as the teachers groups opted out and were not be part of the Proposition 15 process.  Regardless of what some thought about that issue, the measure was successfully advanced through the legislative process in Austin last session. 

That said, some of our concerns have come to light. Issues such as the extreme multiplier, double service credit provisions for all city department heads, except the police chief have justifiably outraged just about everyone who has learned of them.  The backlash related to the discovery of the benefits in relation to the possibility that actuarial assumptions associated with their long-term costs were off the mark by hundreds of millions is significant and is the driving the city’s decision to opt out of the provisions of Proposition 15.

Since all this has hit the news, we have received numerous member and media requests to comment or explain just what opting out means to active and retired HPD officers.  To date, our responses focused on the fact that even if voters support opting out of the provisions of Proposition 15, pension benefits and contribution rates are secure and codified in the HPOPS Meet and Confer contract with the city plus they are codified in state statute.  That means that the city can’t unilaterally change or amend anything connected to our pension.

During the past year, our pension board has been meeting with the administration in an effort to reach a new pension meet and confer agreement.  While the process of pension meet and confer has been stalled for a while, there has been some recent movement from the administration to initiate further meetings that is tied to an effort to see if a new or amended pension contract can be mutually agreed to.  The important thing to keep in mind as it relates to the pension meet and confer process is that the administration can’t force the pension board to do anything or make any agreements that they don’t feel comfortable making.  If the pension board decides that whatever the administration proposes to them is unworkable the only recourse the city would have to attempt to change our pension benefits would be to go to the Texas Legislature and persuade our friends in Austin to make changes to our plan.

Therefore, the concerns officers and retirees have related to worrying that the city’s decision to hold an opt out election will then enable the city to cut or change their benefits is not true.  If any changes take place in the pension meet and confer process, it will be because our pension board agreed to them.  If the pensions meet and confer process fails the only other way that changes to our benefits can be made is if the administration can convince the legislature to change state law via the legislative process in Austin.

We will fight tooth and nail In Austin to not allow any official to reduce retiree’s benefits. Our position has always been that when you leave you should be guaranteed the benefits that you left with.

We have to remember that the soundness of the fund needs to be each and every member's first priority. We need to have that fund here for today's retirees, tomorrow’s retirees and those of you with just a few years on the department.  That does not mean that the police pension board should roll over in any effort to appease the administration.  We are hopeful that once our pension board and the administration sit down to determine what should or should not be done, all of us will be kept informed so that the anxiety associated with such important matters like our pension are kept under control. 

It is important for all retirees and officers to understand our clear position here at the union with respect to pension benefits and COLAs:

We support retirees and future retirees continuing to receive annual compounded Cost of Living Adjustments (COLA).

We do not support HPOPS past or future practice of increasing pension benefits ( excluding COLAs) to retired officers after they have left HPD.

We support working together with HPOPS to protect all officers’ pension benefits.

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