FOR IMMEDIATE RELEASE 09/07/2016
State Not Liable for Municipal Retirement System Financial Obligations
By Representative Jim Murphy
In response to my request, the Attorney General has clarified the question of liability for Municipal Retirement systems in Texas that are overseen by the State Legislature. In opinion KP-0112, the Attorney General summarizes that "The State is not required to assume liability when a municipal retirement system created under Title 109 of the Texas Civil Statutes is unable to meet its financial obligations."
We expect the Legislature will take due notice of the Attorney General's opinion. Now that we've cleared this up and determined that cities are solely financially responsible for their pension systems, it is time for our antiquated system to change. Since the state is not going to be providing any funding, it should allow the cities to determine the expenses for which they are responsible. Very simply, it is time to send these local plans home.
As of 2015, Texas has thirteen local retirement systems controlled by state statute, with their provisions located in Title 109. These thirteen systems have "their contribution rates, benefit levels and the composition of their board of trustees set in state statute," according to the Texas Pension Review Board. When challenges put municipalities at risk for defaulting, the role played by the State Legislature in these specific municipal retirement systems does not carry the burden of liability for the State.
State Representative Jim Murphy represents District 133, West Houston. First elected in 2006, Murphy serves as Chairman of the House Committee on Corrections and is a member of the Ways & Means Committee.