Congratulations to Our Recently Elected Board Officers
In each odd-numbered year, the HMEPS Board of Trustees elects Board officers to the positions of Chairman, Vice Chairman and Secretary. At the January 24, 2013 meeting, the HMEPS Board unanimously re-elected Sherry Mose as Chairman, Roy W. Sanchez as Vice Chairman, and Lonnie Vara as Secretary. Each Trustee has demonstrated skill and leadership in their respective positions and the officers look forward to working with the Board to continue to strengthen HMEPS and provide excellent service to our participants.
DROP Interest Rate for Calendar Year 2013
The Deferred Retirement Option Plan (DROP) interest rate for calendar year 2013 will be 2.5%, effective January 1, 2013. The rate was approved by the HMEPS Board of Trustees at the October 2012 Board meeting.
Several DROP participants have asked how the DROP rate is determined. Under the Meet and Confer Agreement, the DROP interest rate for each calendar year is half (50%) of the HMEPS investment return for the prior fiscal year, with a maximum rate of 7.5% and a minimum rate of 2.5%. The HMEPS investment return for Fiscal Year 2012 was -0.14%. Because half of -0.14% is less than the minimum rate of 2.5%, DROP participants in 2013 will receive 2.5% on their DROP accounts.
DROP is an optional retirement method for members who have reached their normal retirement eligibility (age and years of credited service) but do not want to retire. It is an alternative method of accumulating and receiving a pension benefit from HMEPS. To speak with a benefit counselor to learn more about DROP, please call the HMEPS office at 713-595-0100.
Update on the Texas Legislature - September 12, 2012 PIFS Meeting
On September 12, 2012 the Texas House of Representatives Pensions, Investments and Financial Services (PIFS) Committee met to discuss several topics, including pensions. At the meeting, we reviewed for the Committee the history and current status of HMEPS, and answered questions from Committee members. Our primary message was that the existing Meet and Confer process works. A key reason it works is that one side cannot control the negotiation or unilaterally make changes. Good faith, arms-length negotiations, including appropriate checks and balances, are the essence of the process.
We were pleased to see that the City of Houston, in its written comments submitted to the Committee, agrees that the Meet and Confer process has been successful with HMEPS. Because of the City’s ability to negotiate with HMEPS under the State meet and confer law, the City, according to its statement, “has been able to make substantial progress in providing sustainable, secure retirement plans for…municipal employees.” (Click here for City of Houston "Rationale for Local Control of Pensions" document.)
Be assured that the responsible and professional trustees and staff at HMEPS are the sole fiduciaries of the system, and that we will remain vigilant in providing a secure retirement benefit for all our participants.
Chairman, HMEPS Board of Trustees
HMEPS Receives Award for Excellence in Financial Reporting
The Houston Municipal Employees Pension System (HMEPS) has been awarded the Certificate of Achievement for Excellence in Financial Reporting by the Government Finance Officers Association of the United States and Canada (GFOA) for its 2011 Comprehensive Annual Financial Report (CAFR).
According to the GFOA's release, "the Certificate of Achievement is the highest form of recognition in governmental accounting and financial reporting, and its attainment represents a significant accomplishment by a government and its management.”
“The CAFR was judged by an impartial panel to meet the highest standards of the program including demonstrating a constructive 'spirit of full disclosure' to clearly communicate its financial story and motivate potential users and user groups to read the CAFR."
"We are honored to be recognized by GFOA for our CAFR," said HMEPS Executive Director Rhonda Smith. "Accurate and transparent financial reporting is a top priority at HMEPS, and we are pleased to receive the award."
The GFOA is a non-profit professional association serving approximately 17,500 government finance professionals with offices in Chicago, IL and Washington, D.C. For more information visit www.gfoa.org.
HMEPS Highlighted As One of the Top Performing Local Public Retirement Systems in Texas
HMEPS is well-positioned to deliver secure benefits to its members and value to taxpayers for the long-term. HMEPS, while not immune to the effects of the recession, has weathered the storm better than most public pension systems in part because of sound management of its assets. HMEPS’ 2011 earnings on investments were 22.17%, which greatly exceeded our expected return of 8.5%, and our long-term returns are at and above our expected return.