I’m hearing a lot in the news about CalSTRS being billions in debt. How will this affect my pension I’ve worked so hard for?
I appreciate your question submitted through this member benefits website for the straight story. There are several studies being circulated that inaccurately reflect that state of your pension security. The media has picked them up without vetting the information or the purpose behind the study.
First, CalSTRS member benefits are guaranteed by the California Constitution and protected by the California and U.S. constitutions. There is no risk that the benefits will not be paid.
•CalSTRS retirement benefits are a shared responsibility with
employee contributions, employer contributions and investment
earnings creating most of the funding.
•Because of the 2008 global economic downturn and the role of investment returns in funding benefits, the current unfunded actuarial obligation is $40.5 billion as of June 30, 2009.
•Based on current projections, CalSTRS has assets to pay benefits through 2044.
•After 2044, without an increase in contributions, the state of California—as the plan sponsor—would be obligated to fund benefits on a pay-as-you-go basis.
•CalSTRS is not in crisis now, but members, school districts, the Legislature and Governor will need to work together to achieve a funding solution. Only the Legislature has authority to raise CalSTRS non-member contributions.