The Texas Senate passed Senate Bill 2190, the Houston Pension Solution, Monday with a 25-5 vote. The plan now must receive the approval of the full House and the signature of the Governor to become law.
“Today, the Senate approved a locally developed and agreed-to solution that will place the City of Houston on a sustainable financial path,” said Mayor Sylvester Turner. “I’d like to thank Senator Joan Huffman, the bill’s author, and Lt. Governor Dan Patrick for their work in moving this forward.”
The Houston Pension Solution will immediately reduce the City’s $8.2 billion unfunded liability through future benefit reductions. Under the plan, which utilizes a more realistic 7 percent rate of return on investments, the City will be required to meet its annual contribution until the unfunded liability is fully paid off in 30 years. An innovative corridor concept controls costs for the City.
The plan has the support of two of the three pension system boards, City Council and the Greater Houston Partnership. The Senate’s approval comes on the same day more than 50 CEOs and Houston business leaders released a letter of support (see letter here).
“The Senate has listened to the will of stakeholders in Houston,” Mayor Turner said. “We now move forward to the House of Representatives, where I have full confidence my former colleagues will follow suit.”
The House is scheduled to vote on House Bill 43, SB 2190’s companion, on Saturday, May 6. The bill is authored by Rep. Dan Flynn, chair of the House Pensions Committee. The bill passed that committee last month on a 6-1 vote.