What is CalSTRS doing in response to the California State Auditor’s label of the Defined Benefit Program as a ‘High Risk Issue?’
CalSTRS has been very transparent in providing the Legislature and Administration with financial data that illustrates the need to address a $56 billion funding shortfall, the gap between projected future assets and obligations to retired educators. CalSTRS assisted the State Auditor in developing the information for the report which further underscores that, absent any thoughtful action, the fund is projected to be depleted in the early 2040s.
It’s important to state that the authority and responsibility to develop a long-term plan rests with the plan sponsor and guarantor of the system, which is the Legislature and Administration. CalSTRS encourages a gradual and predictable approach to restore the system’s funding. Acting to increase contributions sooner, rather than later, is the best way to curtail risks to the state General Fund.