City of Houston v. Houston Firefighters' Relief and Retirement Fund

Court of Appeals of Texas·Decided September 28, 2015·No. 14-14-00437-CV·Published

Opinion

ACCEPTED 14-14-00437-CV FOURTEENTH COURT OF APPEALS HOUSTON, TEXAS 9/28/2015 4:29:11 PM CHRISTOPHER PRINE CLERK

No. 14-14-00437-CV

FILED IN IN THE FOURTEENTH COURT OF APPEALS14th COURT OF APPEALS HOUSTON, TEXAS HOUSTON, TEXAS 9/28/2015 4:29:11 PM CHRISTOPHER A. PRINE CITY OF HOUSTON, TEXAS Clerk

APPELLANT,

v.

HOUSTON FIREFIGHTERS’ RELIEF AND RETIREMENT FUND

APPELLEE.

ON APPEAL FROM THE 190TH JUDICIAL DISTRICT COURT HARRIS COUNTY, TEXAS CAUSE NO. 201-02548

BENCH BOOK ________________________________________________________________________

Thomas R. Phillips Travis J. Sales State Bar No. 00000102 State Bar No. 17532080 BAKER BOTTS L.L.P. Tina Q. Nguyen 98 San Jacinto Boulevard State Bar No. 24078670 Suite 1500 BAKER BOTTS L.L.P. Austin, Texas 78701-4078 One Shell Plaza 512.322.2500 910 Louisiana Street 512.322.2501 (facsimile) Houston, Texas 77002 tom.phillips@bakerbotts.com 713.229.1234 713.229.1522 (facsimile) travis.sales@bakerbotts.com tina.nguyen@bakerbotts.com

ATTORNEYS FOR APPELLEE HOUSTON FIREFIGHTERS’ RELIEF AND RETIREMENT FUND INDEX

1. Excerpts from the Fund’s Enabling Statute, Article 6243e.2(1) 2. Excerpts from Texas Government Code § 802 3. Statutes Affecting a Single County 4. Excerpts from Texas Constitution art. XVI, § 67 5. Excerpts from Texas Government Code 810.001 Exhibit 1 Excerpts from the Fund’s Enabling Statute, Article 6243e.2(1)

Section 4:

Service pension benefits

(a) A member with at least 20 years of participation who terminates active service for any reason other than death is entitled to receive a service pension provided by this section.

(b) A member who terminates active service on or after November 1, 1997, and who has completed at least 20 years of participation in the fund on the effective date of termination of service is entitled to a monthly service pension, beginning after the effective date of termination of active service, in an amount equal to 50 percent of the member's average monthly salary, plus three percent of the member's average monthly salary for each year of participation in excess of 20 years, but not in excess of 30 years of participation, for a maximum total benefit of 80 percent of the member's average monthly salary.

(c) A member who terminated active service before November 1, 1997, and who had completed at least 20 years of participation on the effective date of termination of service is entitled on retirement to receive a monthly service pension in the amount provided under the law in effect on the effective date of that retirement, unless a subsequent benefit increase is expressly made applicable to that member.

(d) The total monthly benefit payable to a retired or disabled member, other than a deferred retiree or active member who has elected the DROP under Section 5(b) of this article, or payable to an eligible survivor of a deceased member as provided by Section 7(a) or 7(b) of this article, shall be increased by the following amounts: by $100, beginning with the monthly payment made for July 1999; by $25, beginning with the monthly payment made for July, 2000; and by $25, beginning with the monthly payment made for July 2001. These additional benefits may not be increased under Section 11(c) of this article.

Active 20882466 1 Excerpts from the Fund’s Enabling Statute, Article 6243e.2(1)

Section 10:

Nonstatutory benefit increases

The benefits provided by this article may be increased if:

(1) an actuary selected by the board who, if an individual, is a Fellow of the Society of Actuaries, a Fellow of the Conference of Actuaries in Public Practice, or a member of the American Academy of Actuaries determines that the increase cannot reasonably be viewed as posing a material risk of jeopardizing the fund's ability to pay any existing benefit;

(2) a majority of the participating members of the fund vote for the increase by a secret ballot;

(3) the increase does not deprive a member, without the member's written consent, of a right to receive benefits that have already become fully vested and matured in a member; and

(4) the State Pension Review Board approves the determination by the actuary selected by the board that the increase cannot reasonably be viewed as posing a material risk of jeopardizing the fund's ability to pay any existing benefit.

Active 20882466 2 Exhibit 2 Excerpts from Texas Government Code Ch. 802

Sec. 802.101. ACTUARIAL VALUATION.

(a) The governing body of a public retirement system shall employ an actuary, as a full-time or part-time employee or as a consultant, to make a valuation at least once every three years of the assets and liabilities of the system on the basis of assumptions and methods that are reasonable in the aggregate, considering the experience of the program and reasonable expectations, and that, in combination, offer the actuary's best estimate of anticipated experience under the program. (b) On the basis of the valuation, the actuary shall make recommendations to the governing body of the public retirement system to ensure the actuarial soundness of the system. The actuary shall define each actuarial term and enumerate and explain each actuarial assumption used in making the valuation. This information must be included either in the actuarial study or in a separate report made available as a public record. (c) The governing body of a public retirement system shall file with the State Pension Review Board a copy of each actuarial study and each separate report made as required by law. (d) An actuary employed under this section must be a fellow of the Society of Actuaries, a member of the American Academy of Actuaries, or an enrolled actuary under [ERISA].

Sec. 802.103. ANNUAL FINANCIAL REPORT.

(a) Except as provided by Subsection (c), the governing body of a public retirement system shall publish an annual financial report showing the financial condition of the system as of the last day of the fiscal year covered in the report. The report must include the financial statements and schedules examined in the most recent audit performed as required by Section 802.102 and must include a statement of opinion by the certified public accountant as to whether or not the financial statements and schedules are presented fairly and in accordance with generally accepted accounting principles. (b) The governing body of a public retirement system shall, before the 211th day after the last day of the fiscal year under which the system operates, file with the State Pension Review Board a copy of each annual financial report it makes as required by law. ....

Active 20915400 1 Sec. 802.202. INVESTMENT OF SURPLUS.

(a) The governing body of a public retirement system is responsible for the management and administration of the funds of the system. .... (c) The governing body shall determine the procedure it finds most efficient and beneficial for the management of the reserve fund of the system. The governing body may directly manage the investments of the system or may choose and contract for professional investment management services. (d) The governing body of a public retirement system shall: (1) develop and adopt a written investment policy; (2) maintain for public review at its main office a copy of the policy; (3) file a copy of the policy with the State Pension Review Board not later than the 90th day after the date the policy is adopted; and (4) file a copy of each change to the policy with the State Pension Review Board not later than the 90th day after the change is adopted.

Sec. 802.302. PREPARATION OF ACTUARIAL ANALYSIS. (a) The board shall request a public retirement system affected by a bill or resolution as described by Section 802.301(a) to provide the board with an actuarial analysis.

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City of Houston v. Houston Firefighters' Relief and Retirement Fund, (Tex. Ct. App. 2015).

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Related

§ 810.001
Texas GV § 810.001
§ 201.001
Texas PR § 201.001(a)(2)(B)
§ 2308.209
Texas OC § 2308.209