Fort Worth Council Approves Pension Cuts

City looking to slow growth of unfunded retirement liability

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    NEWSLETTERS

    The Fort Worth City Council will likely end up in court over its vote Tuesday to change its pension benefit formula. (Published Tuesday, Oct 23, 2012)

    The Fort Worth City Council voted Tuesday morning to cut pension benefits for city workers and police officers starting next year.

    The city is staring down nearly $1 billion in unfunded pension costs. But the vote doesn't sit well with the Fort Worth Police Officers Association.

    Nearly 100 members of the FWPOA lined the City Council chambers Tuesday morning to hear how the council would vote to help slow the city's growing $740 million unfunded retirement liability.

    Several members of the police officers' association urged the council to hold off on the vote and solve the problem at the bargaining table.

    Ultimately, the council voted 8-0 to reject a recent POA offer and go ahead with the city manager's plan to reduce benefits to officers and general employees starting next year.

    Councilwoman Kelly Ann Gray abstained.

    The cut in benefits will only affect future retirement earnings. The city said the ordinance reworks the pension formula. Instead of the three highest years of employment determining pension earnings, it will based on the five highest years. Overtime will not be included in the equation. And the percentage of pay a retiree receives, called a multiplier, will go from 3 percent to 2.5 percent. There will also be changes to the cost of living adjustment.

    "This is a tough decision for everybody concerned," Mayor Betsy Price said. "Our employees are crucial to what we do and we care deeply about them. It's never an easy call."

    But the FWPOA called the vote illegal and said it plans to file suit.

    "We do intend to file a lawsuit," said Sgt. Steven Hall, FWPOA president. "We feel that the attack on vested employees benefits is unconstitutional, based on the Texas constitution."

    "If that comes forward, I believe we have a very strong case to be made," Price said.

    The city is so confident, it announced later Tuesday afternoon that it had asked a district court to clarify the law on pensions to resolve the issue once and for all.

    "The city, the fund and the employees will all benefit from an answer to the statutory and constitutional questions related to plan benefits," the city said in an online statement.

    The changes won't reduce the $740 unfunded liability, but will rather work to slow the growth of that liability which could surpass a billion dollars.

    Several council members openly said they weren't sure if it was the right solution but said it's the best option before them now.

    Price said action had to be taken.

    "If it continues to grow, then that means we have to raise taxes or cut city services to continue where we are," she said.

    But Hall said the council vote amounts to a cut in compensation for police officers and could hurt the city in recruiting new officers. Current ones will continue to do their job, even while facing their employer in court, he said.

    "I know they're going to be disappointed," Hall said.

    Firefighters, who are still negotiating with the city, weren't affected by Tuesday's vote.