A new proposal would allow the State of Texas to benefit from the deaths of retired teachers. Under the plan, the state would buy life insurance policies on the retirees and sell them to investors.
A portion of money raised from the policy sales would go directly toward rescuing the struggling retired teacher's healthcare program. The idea already has its critics and hesitant supporters.
It all started with a proposal from former Senator Phil Gramm to Texas Governor Rick Perry. It's his idea on avoiding a projected billion dollar shortfall in the teacher retirement system of Texas's healthcare program called TRS Care. His solution: buy life insurance policies on retired teachers, sell them to investors, take a cut and put the rest into TRS Care.
"My first reaction to it is it's kind of a screwball idea." LISD's Assistant Superintendent of Financial Services, Art Martin, has his doubts the plan will even work. "The only way I think it would work is I think you have to hope to collect more in death benefits than you pay out in premiums and that means an insurance company would lose money."
Exactly how this plan would work is only part of the problem. It also has some wondering if it's ethical to benefit from a retired teacher's death.
Jackie Williams retired from teaching about ten years ago and says she would not be offended if approached, in fact she would be glad to help. "If I thought it would really benefit retired teachers in the future after I am gone. Then I would probably be willing to participant in it."
Jackie is hesitant though, before agreeing to let the state take out a life insurance policy on her. She wants to make sure it's not just the bank who would be bringing in money. She feels the state definitely owes it to retirees to ask their permission. "If they did not ask permission I would be very definitely opposed to it, but in a way, this is a legacy you are bequeathing."
NewsChannel 11 spoke with a representative from Governor Perry's office. They say the proposal is just an idea being considered by Perry and he is willing to listen any ideas, if it means the state won't have to reduce teacher benefits or increase the share they pay into healthcare.