From the video above, you get a quick overview of the Texas scheme to profit on the early death of retired Texas teachers by the bank, UBS, and the Texas state government. This was first brought to light in a Huffington post article yesterday about a prospective 2003 deal:
(Gov) Perry's budget director, Mike Morrissey, laid out a pitch that was both ambitious and risky …the Perry administration wanted to help Wall Street investors gamble on how long retired Texas teachers would live. Perry was promising the state big money in exchange for helping Swiss banking giant UBS set up a business of teacher death speculation.
All they had to do was convince retirees to let UBS buy life insurance policies on them. When the retirees died, those policies would pay out benefits to Wall Street speculators, and the state, supposedly, would get paid for arranging the bets. The families of the deceased former teachers would get nothing.
One of the advantages of this scheme is that the federal government doesn’t tax death benefits so the UBS investors wouldn’t have to pay tax on the so called “dead peasant insurance policies `` and they would pass on some of this extra profit to the Perry government for setting up the scheme using the states proprietary teacher data base. I wonder how this fits into the fair use and privacy laws in Texas. In other countries, this is called a pay off or bribe while in Texas it’s just smart business. I checked the stats for Texas in the soon to be eliminated Statistical Abstract of the United States and discovered that the state is 34th in life expectancy for America. Lots of room for improvement here – think how much money they could make if the state had the life expectancy of Louisiana (49th) or Mississippi (50th). But they’re working on it. According to the Modern Health Care website:
Funding for Texas health and human services programs would be cut by 17.2%, or $11.3 billion, over the next two fiscal years under an agreement worked out by lawmakers from both houses of the state Legislature, according to published reports.Because Texas teachers have an independent retirement fund, they do not pay into the federal social security plan nor do they collect social security when they retire. This means that the retirees are entirely dependent on the health of their retirement fund and the largess of the state government in the event of a shortfall.