Require charter schools to participate in CalSTRS
March 25, 2018


Whereas, the Charter Schools Act of 1992 granted charter schools the option of participating in CalSTRS or adopting another qualified retirement benefit plan for their employees; and

Whereas, currently 927 out of 1,085 California charter schools have opted to participate in CalSTRS, however the number of new charter schools electing to not participate in CalSTRS has increased in recent years raising concerns over the potential impact on the long-term funding of CalSTRS; and

Whereas, currently 4 percent of employer CalSTRS contributions and 2.4 percent of total CalSTRS contributions come from charter schools; and

Whereas, each time a charter school elects not to provide retirement benefits through CalSTRS, it has the potential for making it incrementally more difficult for CalSTRS to achieve full funding, resulting in other employers having to contribute more toward the funding of pension benefits; and

Whereas, should the payroll of CalSTRS-covered members decline as a result of more charter schools opting out of CalSTRS, increases in contribution rates would be required to ensure full funding, even if the unfunded actuarial obligation is unaffected; and

Whereas, the California Charter Schools Association believes the level of the employer contribution rate enacted through Assembly Bill 1469, is a real factor in the decision of whether or not to provide CalSTRS benefits; and

Whereas, for every 1 percent decrease in active CalSTRS membership, the employer contribution rate will increase by about 0.17 percent of payroll based on current funding levels enacted in AB 1469; and

Therefore, be it resolved, that the California Federation of Teachers sponsor legislation that requires charter schools to participate in CalSTRS when providing retirement benefits to their certificated employees.