Pension reductions approved by the Fort Worth City Council for its police officers and general employees will stand, after a federal judge dismissed a police-backed lawsuit Tuesday.
Federal Judge Terry Means of the Northern District of Texas found the changes to the pension plan did not violate the Texas Constitution, which the lawsuit alleged.
“I am glad that a decision was made that provides a sustainable solution for the citizens of Fort Worth and our employees,” Mayor Betsy Price said in a statement. “We made some hard decisions regarding our pension, but in the end we came up with a plan that is fair to our employees and the taxpayers.”
Rick Van Houten, president of the Fort Worth Police Officers Association, and Steve Hall, former president of the association, filed the lawsuit in November 2012. The council approved the pension changes in October 2012.
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Van Houten said he was “extremely disappointed” in the dismissal, and that his board will be looking at all of their options, which includes appealing the decision, over the next month.
“Our pension benefits are one of the key reasons why police officers of which the caliber we have here in Fort worth come to work for the city. ... When those (benefits) are diminished, that severely impacts our ability to recruit and retain the best and the brightest,” Van Houten said.
The changes include:
▪ Reducing the multiplier used to calculate benefits to 2.5 percent;
▪ Eliminating overtime from the definition of compensation;
▪ Raising the number of high-salary years used to determine retirement pay from 3 to 5 years.
For employees who accrued benefits in the old pension formula, their retirement benefits will be based on a two-tiered system combining the old formula with the new to make sure there is not a “taking” of benefits.
A similar lawsuit filed by Fort Worth firefighters in March is still active.
The lawsuit, filed in federal court by firefighters Jim Tate, Donald Clark and Brian Ray in March, also alleges the city violated the Texas Constitution. The Fort Worth Professional Firefighters had also offered to increase their employee contributions from 8.25 percent to 12.64 percent of pay, but the city maintained during negotiations that that was not an option because the city would still be liable for payouts.
The city has been talking tough on the pension fund because, as of January 2014, the unfunded liability of the fund was over $1.12 billion. The amount of obligation may fluctuate following other changes for police and city employees, which the council voted on in October 2012.
Caty Hirst, 817-390-7984