WEST SACRAMENTO, Calif. – The following statement is attributable to California State Teachers’ Retirement System (CalSTRS) Director of Corporate Governance Anne Sheehan:
“While CalSTRS is disappointed Trian did not prevail in their bid to seat a slate of nominees to the DuPont Board of Directors, we are encouraged by the changes Trian Partners have driven at the company. DuPont has acted on many of Trian’s early recommendations and, as partners with Trian, we are prepared to work from the outside toward long-term growth in collaboration with the board.
This page outlines how CalSTRS handles pension spiking, what we’ve done recently to improve our prevention, detection and resolution of suspected incidents of spiking, and how we intend to continue improving our capabilities.
CalSTRS takes pension spiking seriously. We have a fiduciary responsibility to collect and ensure accurate reporting of compensation. Efforts that improve our ability to aggressively detect and pursue instances of suspected inappropriate pension benefit enhancement, known as spiking, are underway.
CalSTRS determines spiking to be the inappropriate enhancement of the retirement benefit, which most frequently occurs when an employer pays an excessive increase in compensation to a member at the end of his or her career. In instances where spiking has been determined, CalSTRS adjusts benefits to the appropriate level and collects overpayments in a manner consistent with the law.
Audits: CalSTRS regularly conducts school district audits and analyzes employer compensation reports to identify excessive increases that could enhance a member’s final pension benefit. This includes an analysis of other risk factors, such as large amounts of special compensation and inconsistent pay raises throughout a members’ career. For calendar year 2012, CalSTRS identified approximately $1,500,000 in benefit overpayments based upon 19 employer audits.
Compensation Review Unit: In September 2011, CalSTRS formed an additional, anti-spiking, Compensation Review Unit (CRU) focused on analyzing individual instances to determine if compensation changes have resulted in pension spiking. For calendar year 2012, the CRU reviewed 175 instances and identified 13 individual overpayments totaling $320,000.
Electronic privacy is crucial for the ongoing success of the Internet as a convenient means to provide customer service. Your personal information will be used only to conduct CalSTRS-related business.
The California State Teachers’ Retirement System website has been developed in compliance with California Government Code §11135, which requires that all electronic and information technology developed or purchased by the State of California is accessible to people with disabilities. There are various types of physical disabilities that impact user interaction on the web. Vision loss, hearing loss, limited manual dexterity, and cognitive disabilities are examples, with each having different means by which to access electronic information effectively.