Midland Times met with Mayor Lori Blong and Justin Graham, Chairman of the Midland Firefighters’ Retirement Fund (MFRRF), to discuss the city’s pension fund for firefighters.
As of October 2022, the Texas Pension Review Board, a state agency, warned that the MFRRF could run out of assets in 22 years. In response, the Midland City Council and local firefighters pledged to collaborate on a solution during a June 2023 press event. According to the latest actuarial report from Rudd & Wisdom, Inc., the unfunded liability is $120.94 million as of Dec. 31, 2023.
“We have pushed through two years of earnest effort to get to a solution,” Mayor Blong said. “It has been a long process, but we are coming to a conclusion to get the debt paid off.”
A key proposal under discussion would reduce firefighters’ pension benefits by five percent, a move that has raised confusion among residents. The figure refers to a change in firefighters' pay, not a reduction in the total debt of the fund. The adjustment would result in a reduction in firefighters' total compensation, which includes payroll and benefits. The change is in addition to a 7.1% adjustment made in the summer of 2023.
A primary concern relates to how proposed changes to the pension plan will impact individual firefighters given their different years of service and proximity to retirement. Midland firefighters are being briefed on the proposed changes.
“Any change that will come to this plan affects each firefighter differently,” said Graham. “Each firefighter has their own plan regarding their retirement and future, so anything that we do could change their plans.”
Midlanders have also questioned whether revenue from local businesses, such as the Midland Development Corporation (MDC), would be used to help address the pension debt. However, both Blong and Graham made it clear that those funds cannot be used for the pension.
“There are very specific parameters that would make it illegal for us to use those funds for this purpose,” Blong said. “If we are discussing funds that are available for this, it’s up to funds that are available to the city that have more latitude to utilize.”
Progress has been made toward resolving the pension issue through a series of actions. In July 2023, the Midland Fire Department held a vote to change the pension plan, including eliminating overtime from retirement calculations and adjusting how retirement benefits are calculated. The changes went into effect on Jan. 1, 2024.
In December 2023, the Midland City Council voted to increase the city’s employer contribution rate to the pension fund from 22.2% to 24.2%, effective Jan. 1, 2024. On Nov. 4, 2024, the MFRRF board approved a funding resolution indicating their intention to present a vote to firefighters on the five percent benefit reduction and the implementation of an Actuarially Determined Contribution (ADC) arrangement. This decision is contingent on the city’s required payment to bring the fund into a 30-year amortization period.
Most recently, on Nov. 12, 2024, the Midland City Council approved a resolution committing to an official funding plan for the pension fund, authorizing and allocating the necessary funds to support the plan’s implementation.
“We are committed to getting this solved, and we’re hopeful that this will come to a successful conclusion in the near future,” Graham said.