Some cities in trouble, Combs says
Texas’ major plans — the Teacher Retirement System of Texas and the Employees Retirement System of Texas — don’t have enough assets to cover future obligations, largely because of their investment returns during the recession. But the funds’ assets do exceed the 80 percent threshold experts say is needed for a plan to be healthy.
Combs said there are indications that some local plans, particularly in Houston, have funding troubles.
“A California-style problem could one day be in the cards for some cities, which has the effect of exerting downward pressure on other parts of your local budget, which, of course, ultimately affects you, the taxpayers,” Combs said.
Max Patterson, executive director of the Texas Association of Public Employees Retirement Systems, said he has been hearing from elected officials that they have confidence in the pension systems across the state and they aren’t inclined to push for a wholesale conversion to the 401(k)-type system.
“I think that push has come from … a handful of isolated, individual groups that have their own cause and their own belief,” Patterson said.
The pension report released Tuesday was the fourth and final installment in a series called “Texas, It’s Your Money,” in which Combs’ office has looked at local government debt and taxes. She has called for legislation that would require local governments to provide more information to voters during bond elections as well as other transparency measures.
She noted that some local governments were resistant or weren’t responsive to releasing details about their finances.
“If it’s hard for us to find out, it’s really had for the average citizen,” Combs said.