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The Houston Pension Question: How the City's Pension Liability Grew and the Options for Reform 

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Houston today faces an increasing unfunded liability for its employee pensions that totals at least $3.9 billion, as of 2015, up from $212 million in 1992. If no action is taken, that unfunded liability is expected to continue growing. However, the city has some options, however painful, that can reduce the unfunded liability and restrain its future growth. This report is designed to contribute to the ongoing discussion of the future of Houston's pensions by: 

  • Clarifying the specific nature of the challenges affecting each of Houston's three pension systems.
  • Putting Houston's pensions in greater budgetary context.
  • Comparing and contrasting the position of Houston's pensions to those of other large U.S. cities.
  • Identifying potential options for reform and explaining the advantages and disadvantages of each of those approaches.
  • Highlighting the experience of several large U.S. cities that have pursued strategies to address their pension systems' liabilities.