Kelly, I find your argument(s) above to be framed as an either/or proposition when the issue to those of us who you label as “continuing a political fight that began in 2015” see this as a both/and. Houston needs to address the escalating liability of these benefit plans through refinancing them in a voter-approved, fiscally responsible manner AND we need to stop digging the hole deeper by moving from defined benefit plans to defined contribution plans for future employees. The promises you make above regarding this being a solution now and in the future: Would you bet your life on that? Do you have any words of wisdom for us regarding the City’s ability to hire qualified candidates in fire and police once the corridor provisions kick in, as they surely will? Can you tell us what will happen with the existing plans if you are unable to AVERAGE 7% returns over the next 30 years?
When one reads your words, you find nothing wrong with breaking the campaign promises of “we will not do anything to reduce your pensi0n benefits” that Mayor Turner repeatedly made to the fire, police, and municipal workers (those unions remember those promises, even if you have already conveniently forgotten them). You then criticize those of us who would honor those commitments to existing employees while capping the ever escalating unfunded liability by moving new employees to the same type of Defined Contribution plans that 96% of private sector employees must select from. Your argument is as unethical as anything I have read in years from a city employee: We are going to break our promises to you, the pensioners, AND we are going to insist on keeping the same system for future employees that we are proposing breaching with current employees.
The business and financial community of the Greater Houston Area does not agree with your analysis. The following is a list of people who reject your arguments above regarding the urgent need for a Defined Contribution plan that you critique:
If you review this list, note the following about the signers:
The Chairman of one large Regional Bank, the Regional Presidents of a National Bank and an International Bank, and several other senior banking officers
42 MBAs, 50% of whom went to Harvard, Wharton, Kellogg, McComb, Sloan, Rice or Booth
7 CFOs of Publicly Traded companies
8 Former Partners of Big-4 Accounting Firms
3 persons on Boards of Publicly Traded Companies
Several executives with Investment Banking and Investment Management firms
Kelly, are you really prepared to say that Mayor Turner’s plan is as good as you describe and that this list of people are all wrong for saying “The Mayor’s plan is inadequate and that (1) we need the Legislature to require new employees hired after June 30, 2018 to be covered under defined contribution plans and (2) Houston taxpayers should be allowed to vote on pension obligation bonds before the City can issue them? If so, please look up the word “hubris.” [Note to readers: In 2003, the Legislature exempted pension obligation bonds as being the only bonds not requiring voter approval before their issuance; our group wants that one-and-only exception repealed.]