In a world where many pension funds have been generating near-flat returns, the people managing one Texas public safety fun have done a red hot job.
The Houston Firefighters' Relief and Retirement Fund ranked among the top earners in the annual statistics generated by the Private Equity Growth Capital Council, according to the Houston Chronicle.
Houston's firefighters' fund averaged an impressive 11 percent return over the past decade, making it the seventh-best performer in the study.
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Private equity investments make up 11.5 percent of the fund's portfolio and those investments generated overall returns of 8.7 percent over the decade – though in the past three years, private equity earnings have been closer to 3.3 percent.
The strong showing is being used by both sides in what is described as an acrimonious tug-of-war over public pension benefits in Houston. Civic leaders are pushing for a new pension deal to help cut the $61.5 million annual bill the firefighters' pension currently costs the city, going so far as suing the pension fund to release financial data.
Controversy also continues over the fact that many retired city employees get a pension check larger than their working paycheck – with the average 25-year-plus firefighting retiree earning a pension 58 percent higher than their pay if they retired in 2011, according to the city's chief pension executive.
Retiring police officers were gifted with retirement benefits, on average, 12 percent higher than their outgoing pay, and municipal employees received an average 19 percent "raise for retiring," according to analysis. Officials claim that Houston's overall pension obligations will rise to $191 million in the coming year.
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