As the world’s largest educator-only pension fund, the California State Teachers’ Retirement System, or CalSTRS, embodies a century-long pledge to uphold the state’s promise of a secure retirement to teachers.
CalSTRS’ dedication to act as fiduciaries on behalf of California’s teachers requires that we correct the record to assure our members, stakeholders and the public that the CalSTRS Funding Plan is working and to argue strenuously for the defined-benefit pension as the best choice for career educators.
Assembly Bill 1469 established the CalSTRS Funding Plan in 2014, which required increased contributions from CalSTRS members, school districts and the state to fully fund the CalSTRS Defined Benefit Program by 2046. While it will take several decades for CalSTRS to reach full funding, the system is on the right track forward and the CalSTRS Funding Plan is working as intended.
Several factors unique to CalSTRS created the need for the funding plan in 2014. Unlike most public pension plans, CalSTRS’ contribution rates are fixed in law and prior to the plan the Teachers’ Retirement Board had no authority to change rates. Therefore, when market conditions necessitated an increase in contribution rates, such as during the 2008 financial crisis, CalSTRS’ only mechanism to adjust rates was to seek approval from the Legislature and governor. Click here to read more: https://edsource.org/2019/californias-school-pension-funding-plan-is-working/611031