March 23, 2018 / 9:08 PM / 7 months ago

Houston reaches $40 million settlement with pension actuary

(Reuters) - Houston has settled litigation with a firm over its actuarial work for the city’s retirement funds dating back more than two decades, Mayor Sylvester Turner’s office announced on Friday.

The settlement, which is subject to a city council vote next week, calls for Willis Towers Watson to pay the city $40 million, according to council’s meeting agenda. The city would get $29 million with the remainder earmarked for legal fees related to the litigation.

Houston filed a lawsuit in August 2014, claiming negligence, misrepresentations and professional malpractice on the part of the firm in connection with its work in the late 1990s and early 2000s for the Firefighters’ Relief and Retirement Fund.

“Under the settlement, the city has agreed to dismiss its lawsuit and to release any potential claims based on (Willis Towers Watson’s) work for the Houston Municipal Employees’ Pensions System and the Houston Police Officers’ Pension System,” a statement from the mayor’s office said.It added the firm has denied any wrongdoing and that the settlement does not constitute an admission of wrongdoing.

In a February earnings release, the firm said it exited the business of doing actuarial work for states, local governments and their pension funds more than a decade ago.

Houston is tackling an $8.2 billion unfunded pension liability with a 30-year cost-saving plan signed into law last year by Texas Governor Greg Abbott. That plan included the city’s issuance of $1 billion of taxable pension bonds in December.

Reporting by Karen Pierog in Chicago; Editing by Matthew Lewis

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