CalSTRS lobbies for gradual increase to underfunded pension
As the current legislative session winds down, leaders of the $154-billion California State Teachers' Retirement System have opted to begin a lower-key, multiyear lobbying campaign to convince Gov. Jerry Brown and lawmakers to approve a gradual increase in state, community college and school district contributions for the retirement of 852,000 public school educators.
Without a contributions boost, the pension known as CalSTRS faces a projected $56-billion funding gap and could run out of money in 32 or 33 years, said Chief Executive Ehnes in a meeting Tuesday with the Los Angeles Times editorial board.
The fund now has only 71% of the money estimated to meet pension obligations. That contrasts with 110% it had at the beginning of the decade, more than enough to pay all future pensions.
Experts consider 80% to be the minimum secure level.
"We're asking the governor's office to develop a funding plan" to bring CalSTRS' funding ratio back into the 80%-100% range," said Ehnes. Such a plan "should be part of the budget process."
CalSTRS lost more than a quarter of its value during the recession of late 2007 through summer of 2009.
Since then, it rose to $154.3 billion on June 30, still off a record high of $160 billion in 2007.
CalSTRS' investment portfolio grew by 23.1% in the fiscal year that ended June 30.
-- Marc Lifsher
Photo: CalSTRS CEO Jack Ehnes. Credit: Peter DaSilva / For the Times.