Will CalSTRS ever get involved in providing health benefits to retirees?

Ask Jack Jack Ehnes

CalSTRS does not provide health care benefits as they are collectively bargained at the local school district level. Although CalSTRS primary focus is the pensions of California’s educators, the availability of affordable health care can have a tremendous impact on the ability of members to maintain their standard of living in retirement.

Throughout the years, the Teachers’ Retirement Board has evaluated a number of different approaches that it could take to improve the health security of CalSTRS members. In May 2003, the board decided it was not appropriate for CalSTRS to provide health insurance, but that it might finance health insurance in the future when funds become available.

One approach recommended by the board’s Public Education Health Benefits Task Force in May 2008 would provide monthly health allowances for retirees to be used to pay medical expenses. This would be financed by increasing either employer or state contributions to CalSTRS.

Given the need for additional contributions to fund CalSTRS’ existing Defined Benefit Program, however, establishing a new health benefits funding program utilizing those same resources was determined not to be advisable at this time.