The Governmental Accounting Standards Board issued two new
accounting standards that significantly change the way pensions
are reported. Statement 67, Financial Reporting for Pension
Plans, becomes effective for CalSTRS in fiscal year 2013-14.
Statement 68, Accounting and Reporting for Pensions,
becomes effective for plan employers in fiscal year 2014-15.
Among the specific issues identified for cost-sharing,
multiple-employer plans, such as CalSTRS, is use of a blended
discount rate. The new blended rate considers a long-term rate of
return on plan assets, which reflects a pension fund’s long-term
investment strategy, and a high-quality, non-taxable municipal
bond index rate, to account for the potential need to borrow
funds to pay pension benefits after net assets have been fully
Using this new blended discount rate may cause plans that are
projected to run out of assets, like CalSTRS, to appear to have
an increased unfunded liability. However, although the liability
may be reported on a financial balance sheet as a new,
significantly higher amount, the actual current shortfall of
approximately $74 billion projected by CalSTRS will not change as
a result of the new standards.
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WEST SACRAMENTO, CA – The California State Teachers’ Retirement
System (CalSTRS) today announced that, effective January 1, 2014,
CalSTRS Retirement Progress
Reports (RPR) will be available exclusively online, unless a
paper version is requested. The change is enacted under
Assembly Bill 989.