The nearly $4 billion Fund provides pension and disability benefits for over 6000 active and retired firefighters and their families.
The City sought a declaration that the Texas pension statute governing Houston firefighters is unconstitutional because the City claimed 1) the statute improperly delegates legislative authority to set benefits and contribution rates to the Fund’s board of trustees, 2) the statute is a special rather than general law that only applies to Houston, 3) the statute violates the Texas Constitutional provision regarding abilities of local governments to create their own retirement systems, and 4) the pension benefits do not reasonably relate to the firefighters’ contributions.
In rejecting all of the City’s arguments, the Court held that the Fund’s board of trustees is a public rather than private entity which has been provided reasonable standards by the statute to govern the Fund.
Contrary to the City’s argument, the Court found that contributions to the fund are set by the Act and by actuaries and are ”not arbitrarily decided by the board.”
The panel also held that the statute is not an unconstitutional special law, even though by its population bracket it only applies to Houston, because the legislature could have reasonably considered the special circumstances of Houston—that it is the largest and most industrial city in the state with the port, chemical plants and refineries as well as a large geographic footprint. These differences can mean greater emergency calls with greater risk of injury and death.
The Court noted that Houston has had a long-standing state required pension system and that the Constitutional provision allowing cities to create their own only applies when the state has not already established one.
Finally, the Court found that the City failed to show that the statute violates the Constitution on the basis that there is not a reasonable relationship between benefits and firefighter contributions.
The Baker Botts team for the Houston Firefighters’ Relief and Retirement Fund includes Travis Sales (Partner, Houston), who argued the case to the 14th Court of Appeals, Tom Phillips (Partner, Austin), Rob Fowler (Partner, Houston), Tina Nguyen (Associate, Houston), and Sheila Bickel (Senior Paralegal, Houston).
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