AUSTIN (WBAP/KLIF News) — A Texas lawmaker has filed a bill that would offer different pension options to newly hired teachers.
State Senator Paul Bettencourt says the current pension system for teachers just isn’t working anymore.
“We’ve got pension plans that haven’t met their investment targets for over 10 years,” Bettencourt said, saying the targeted return on investment is supposed to be eight percent, but it hasn’t gotten above six in the last decade.
He says he authored the bill to start the conversation so new-hires won’t be caught in what he calls a “relic of the past.” The bill, if passed, would provide a hybrid option that combines elements of a defined benefit plan and defined contribution plan, but only applies to new-hires.
Bettencourt said current teachers’ pensions would not be affected by the bill, labeled Senate Bill 1751.
“We need to start the conversation on what type of plan we’re going to be able to offer them that also takes into [consideration] the taxpayers’ ability to pay, because the defined benefit plans have been very expensive over time,” Bettencourt said. “And we’re just not making the targets on the investments that it takes to pay them off.”
