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As funded status rises, contribution rates to remain the same

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The funded status for the CalSTRS Defined Benefit Program rose to 75.9% as of June 30, 2023, according to the most recent actuarial valuation: an annual assessment of the Teachers’ Retirement Fund’s assets and liabilities. The funded status refers to the ratio of CalSTRS assets compared to its total liabilities. 

The valuation results indicated the Defined Benefit Program was slightly ahead of schedule to reach full funding by 2046.

These assessments guide the Teachers’ Retirement Board in determining whether adjustments to contribution rates for employers and the state are needed to keep the defined benefit plan on track.

The CalSTRS Defined Benefit Program is a traditional, defined benefit plan that provides retirement, survivor and disability benefits to members. A "defined benefit" retirement, as opposed to common "defined contribution" plans such as a 401(k) or 403(b), features a guaranteed pension payment amount members will receive throughout their retirement.

This is the sixth consecutive year the CalSTRS funded status has increased. The funded status has grown more than 13% (from 62.6% to 75.9%) since 2017.

Because of this success, CalSTRS recommended, and the board agreed, to keep the employer and state contribution rates at their current levels. Keeping these contribution rates at existing levels will maintain stability in the contribution rate, improve funding levels and reduce risk in the event of future adverse investment outcomes.

Total contribution rates for July 1, 2024, through June 30, 2025:

  • State: 10.828%
  • Employers: 19.1%
  • CalSTRS 2% at 60 members: 10.250%
  • CalSTRS 2% at 62 members: 10.205%