Pension benefits

Regarding the editorial “Pension tension” (Page A18, Thursday), replacing defined-benefit pensions with 401(k)s for Houston municipal employees leave working families short for retirement. The Chronicle recently reported on the lack of access to retirement savings accounts faced by many Texans. Of those who do have a 401(k), the average balance is only $32,028.

A sizable portion of the city’s payroll does go toward employee pensions; however, much of that is actually pay that city workers set aside for their own pensions. Public pensions generally are funded by public employees themselves. Contributions from their paychecks, plus investment returns over decades of service, comprise the bulk of pension fund assets. The third source is provided by the employer, and the city of Houston has failed to consistently contribute its share, leaving funds short.

If your boss promises a pension, makes you pay your part, and fails to do his part to fund a pension he promised, that is fraud. Mayor Sylvester Turner has indicated no desire to perpetuate such fraud on those who serve the people of Houston.

Pension contributions are not “dedicated to sending checks to people after they no longer serve the taxpayers,” as the editorial argues. Contributions made today are investments by active employees toward their own retirement. Retirees draw from the pension fund assets that they contributed long ago and that have grown over time through investment.

Defined-benefit pensions provide a benefit for life, are professionally managed and carry lower fees that benefit workers, not Wall Street. Policymakers at the city and state levels should expand access to defined-benefit pensions, not eliminate them.