The state’s teacher retirement system and other pensions have major problems, Wharton County State Rep. Phil Stephenson says, adding he’s now developed a model of how his solution should be put into place.
The math works, he says, just so long as people don’t start living past 120.
The pending HB 248, authored by Stephenson, R-Wharton, introduces a formula he says will ultimately produce billions, by buying teachers $100,000 life insurance policies and using the interest/value of the policies to fund retirements.
“Everything works,” he said. “In one generation of teachers, you don’t need money to borrow ... and it will multiply like a crazy thing ... It’s an income generator that pays for itself.”
Stephenson’s background as a CPA makes it easy for him to follow the math. For the rest of us, the key will be the working model, he said, showing how the numbers flow. Now, he just needs to be able to get it before the Pensions Committee.
“TRS (the Teacher Retirement System) is $50 billion in the hole. ERS (Employee Retirement System) is in the hole ... There are close to one million employees. In 30 years, it (the pensions) would be completely unfunded.”
Stephenson’s plan puts half the life insurance payout into teacher’s beneficiary’s hands if a death occurs. The state, which paid all the costs, would collect the rest.
The state also reaps the dollar from premium index.
“Everything’s in there to make things grow,” he said. “I need a test model – $50,000 for a study. That’s my goal. I can’t get people to understand. It saves everybody money. It give teachers more money, better pensions ... It would save the state billions.”
Stephenson’s hoping to push the bill through to Ways & Means this session and ultimately to a vote.
Currently serving his fifth term, Stephenson represents all of Wharton and Jackson counties as well as the western portion of Fort Bend County.