What can CalSTRS members do to make sure the retirement fund is sufficiently funded and to address the current shortfall?
What is needed to provide stability to the Defined Benefit Program is an increase in contributions made by members, employers and the state. Right now, those contributions are set in statute and the Teachers’ Retirement Board has no authority to adjust the contribution rates. For many years, contribution rates have been remarkably stable; member rates have not increased since 1972, employer rates have not changed since 1990, and the state’s rate is lower than it was since 1997.
We are confident the CalSTRS $71 billion shortfall can be managed, but the solution requires thoughtful action on behalf of the Legislature and the Governor. The state must act to adopt a responsible funding strategy that will protect the state General Fund and uphold the state’s promise to educators. Absent any changes in contribution rates or liabilities, current calculations project that the Defined Benefit Program will deplete its assets in little more than 30 years.
CalSTRS submitted a formal report to the Legislature in February 2013, on this issue titled “Sustaining Retirement Security for Future Generations: Funding the California State Teachers’ Retirement System,” which is posted on CalSTRS.com.
To better understand the needs of your retirement system, stay in touch with CalSTRS, read information posted on our website and in our newsletter articles and listen in to board meetings. For nearly 10 years CalSTRS has been communicating our funding situation and what is needed to address it. CalSTRS remains committed in its mission to secure the financial future and sustain the trust of California’s educators.