HB2688

HB2688 changes Houston’s firefighter and police pensions beginning September 1, 2025. It broadens retirement and deferred-retirement options, changes how pension costs are allocated, and removes a specific firefighter-benefit court-appeal procedure. It does not give every member the same benefit amount. Final law

Firefighters: Members hired or rehired under the post-2017 tier can qualify for a service pension after 20 years of service, replacing their rule that age plus service must total 70. Their existing benefit formula and 80%-of-average-salary ceiling remain. The normal-retirement definition also recognizes age 50 with at least 10 years of service. Members leaving for reasons other than death with 10 to fewer than 20 years can receive a deferred pension starting at age 50, regardless of hire tier: 1.7% of average monthly salary for each year of participation. The existing option to choose a contribution refund instead remains; those leaving with fewer than 10 years receive a refund without interest under Section 8(c). The retirement changes apply to retirements on or after September 1; the deferred-pension changes apply to departures on or after that date. Prior firefighter statute, Sections 4 and 8

The firefighter Deferred Retirement Option Plan (DROP) now admits otherwise-eligible members of the newer tier after 20 years of participation. DROP lets an employee keep working while pension amounts accumulate in an account; the election fixes the retirement date used to calculate the pension and, once approved, is irrevocable. The maximum participation period and monthly pension-credit period increase from 13 to 15 years. Existing participants are included. Earnings can continue after that limit, but this is not permission to earn unlimited monthly pension credits. Existing plan rules, including board procedures, remain.

Police officers: Normal retirement becomes available after 20 years of service, or at age 60 with at least 10 years, without the former hire-date distinction and post-October 9, 2004 rule of 70. Active members who reach normal retirement age can elect DROP, instead of limiting it to the older hiring group with 20 years. Accepted elections remain irrevocable; existing benefit calculations and DROP limits on additional service/pay credit remain. The firefighter 15-year provision is not a new 15-year rule for the police plan. Prior police statute, Sections 2 and 14

For both funds, the law replaces an actuarial costing method based on newly hired employees’ benefits with one reflecting each individual employee’s benefit tier. This changes the allocation between future normal costs and accrued liabilities, not the amount of money already held by the funds. The reproduced valuation rules retain the 7% assumed-return ceiling and existing 30-year liability-layer framework.

The firefighter fund’s population threshold increases from 1.6 million to 2 million. The law also repeals Section 12’s specific district-court appeal process for firefighter benefit decisions, which had covered rejection or amount of benefits and required notice within 20 days. It removes the corresponding court-appeal reference from pension-benefit committee decisions while retaining available internal appeals to the board. That is a loss of a particular statutory appeal route—not a finding that every possible court remedy is unavailable.