WEST SACRAMENTO, Calif. – The California State Teachers’ Retirement System is celebrating the appointment of its Chief Operating Investment Officer, Debra Smith, to the Public Company Accounting Oversight Board’s Standing Advisory Group. Ms. Smith will represent the investors’ perspective and voice in the advisory group. Her three-year term runs through the end of 2019.
WEST SACRAMENTO, Calif. – Consistent with its commitment to ensuring a financially sound retirement system, the California State Teachers’ Retirement Board today voted to adopt a new set of actuarial assumptions that reflect members’ increasing life expectancies and current economic trends. Today’s decisions were based on the multi-year CalSTRS Experience Analysis, commonly referred to as the experience study, spanning July 1, 2010, through June 30, 2015.
The Governmental Accounting Standards Board issued two new accounting standards that significantly change the way pensions are reported. Statement No. 67, Financial Reporting for Pension Plans, was implemented by CalSTRS in its fiscal year 2013-14 financial statements. Statement No. 68, Accounting and Reporting for Pensions, is effective for plan employers in fiscal year 2014-15.
Under previous standards, the pension obligation calculated for funding purposes and financial reporting were closely aligned. The new standards break the link between funding and financial reporting by moving from an approach that focuses on the process by which employers finance their future projected cash outflows for pension benefits, to one that stresses the obligation an employer incurs through the employment-exchange process. Significantly, the employers’ collective pension obligation, which was previously only disclosed in the notes to CalSTRS financial statements, will be reported as a liability in the employers’ financial statements.
The employers’ collective pension obligation is referred to as the Net Pension Liability. CalSTRS reported a Net Pension Liability for the State Teachers’ Retirement Plan of $67,324 million as of June 30, 2015.
CalSTRS is actively communicating with our employers regarding the new accounting standards through a variety of methods including:
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