Tuesday, January 31, 2012
Bill King talks to the Backgate about the current state of Texas Employee pensions
The Backgate covered a story two weeks ago involving Bill King, a wealthy businessman from Houston who has long fought against the city of Houston's employee pension plan, and now has his sights set on the destruction of the Texas Employee pension system. King has likened the Houston pension plans, that are similar to that of Texas state workers to " watching the Titanic hit the iceberg in slow motion", responding to the solvency of the plans over the years to come. "I think the state needs to get the hell out of this (pension) business completely," said lawyer Bill King, who is forming Texans for Public Pension Reform with others from the Greater Houston Partnership, an über-chamber of commerce with business members representing $1.5 trillion in assets.
King recently stated to the Backgate that there may be some misunderstanding as to what the issues are. King seems to see the current system of pension management as archaic and unsupportable. many Texas counties have joined the march against the basic pension system and favored using a 401K plan. That system can provide risks to the employee, but are far more dependable then an ailing state payed pension system that may or may not be funded 10 years from now says King. King stated in a recent email to the Backgate, "I have not proposed a specific plan, however as you will see from what i have written i have adamantly maintained that benefits that have already been earned should not be changed." King made that statement in regards to our questions about how the new plan would work if implemented, and if it would strip the current pensions of vested state of Texas Employees.
King states that his mother in law, aunt, and former wife all currently receive benefits from TRS (Teachers Retirement System of Texas) but that plan alone is $38 million dollars underfunded. Kings went on to say that " This is as much of a problem for public employees as it for taxpayers".
In opposition to King's plan, "They don't have to destroy a system that works," said Keith Brainard, research director of the National Association of State Retirement Administrators. He said government pensions provide retirement security for millions of Texans in a cost-effective manner for taxpayers. Research by the Center for Retirement Research at Boston College shows that professionally managed pension funds produce better investment returns than 401(k)s and cost less to administer.
"When there are rumblings, you sit up and take notice," said Bill Miller, a prominent Austin political consultant and lobbyist representing the employee pension groups. Miller said he doubts that pension reformers will be able to make it a major issue in next year's legislative elections. But if they do, he said there are 2 million public pension members in Texas who will stand up and take notice. "I'm not picking a fight, but I'm not backing off from one, either," Miller said.
Talmadge Heflin, former House appropriations chairman, agreed that it is probably too late for the pension reform group to be a major force in the 2012 elections. But they could make waves during the 2013 legislative session, said Heflin, who has advocated for similar reforms as director of the Texas Public Policy Foundation's Center for Fiscal Policy.
King said the campaign is in its infancy, and its specific goals are still being developed. It's not clear how the campaign will get involved in next year's elections or the 2013 legislative session, but King said he is confident the campaign will soon make pensions an issue for lawmakers. King said he would support a constitutional amendment eliminating public pensions in the state and moving all government employees to retirement accounts akin to 401(k)s. Legislators would have to approve such an amendment on the ballot when they convene in 2013.