CalSTRS reports that its unfunded liability grows by $22 million every day that nothing is done. While most California public pension funds can raise annual employer rates when they need more money, CalSTRS requires legislation to raise rates.

Although the governor’s new state budget proposal did not include specific language addressing long sought-after rate hikes for CalSTRS, he did commit to begin meeting with key constituency groups over the next year to create a plan for long-term solvency for CalSTRS. The governor calls for a CalSTRS plan that would be enacted in the 2015-16 fiscal year and phased in over several years.

Another issue is how much each of the three CalSTRS contributors would increase their contributions. Currently, teachers pay 8 percent, school districts pay 8.25 percent and the state pays approximately 5 percent.

A CalSTRS legal opinion argues that the teacher contribution is a “vested right” protected by court rulings that also bar pension cuts unless offset by a new comparable benefit. 
Gov. Brown, in a press conference, commented, “I’ve set forth a period of time to meet with all the stakeholders and work it through. It’s going to be daunting. It has to be done, and sometimes it’s hard to get things done until people really see the disaster ahead.”

There is general agreement that the gap cannot be bridged by investment returns alone, said Jack Ehnes, CEO of CalSTRS. 

— By Sharon Hendricks, campus chapter president for the Los Angeles College Faculty Guild, AFT Local 1521

CalPERS raises employer and state contribution rates

CalPERS, the retirement system that serves many classified employees in California schools and colleges, has upped the contribution rate for employers and for the state, a shift intended to close the gap between the fund’s assets and its long-term commitment to retirees.

As the largest public pension fund in the nation with more than $277 billion in assets, CalPERS administers health and retirement benefits for more than 3,000 public school, local agency and state employers.

The rate increases for local public agencies will be phased in over five years with costs spread over 20 years. CalPERS staff estimate local governments could see costs rise up to 5 percent of payroll for typical state employees and up to 9 percent of payroll for safety classifications in year five of the phase-in.

CalSTRS switches to paperless delivery for statements

Each fall, CalSTRS provides its members with an annual account statement, the Retirement Progress Report, which provides an overview of a member’s benefits and account activity for the previous fiscal year.

As a result of recent legislation, CalSTRS will begin delivering all Retirement Progress Reports exclusively through its secure member website, myCalSTRS, unless members request mail delivery by June 16. Individual reports back to 2002 will be available for view on myCalSTRS. 

>Learn more on the CalSTRS website. If you don’t already have a myCalSTRS account, it’s easy to register at