Ask Jack

Ask Jack

Overview
Chief Executive Officer of CalSTRS, Jack Ehnes

Ask Jack is an online communication channel offered by CalSTRS CEO, Jack Ehnes. This Web forum solicits questions about the sustainability and administration of the CalSTRS Defined Benefit Program. Not all will be posted directly, but Jack’s responses will be inclusive of views and perspectives.

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Ask Jack Jack Ehnes

How’s the health of the purchasing power protection of CalSTRS pensions and the account that funds those payments?

The purchasing power protection program is a supplemental benefit paid quarterly if the value of the initial pension amount falls below 85 percent of value, as measured by the California Consumer Price Index once the 2 percent annual benefit adjustment is added to the member’s pension. The purchasing power protection program is funded almost entirely from a state General Fund contribution to a special account, called the Supplemental Benefit Maintenance Account (SBMA).That contribution requirement is a contractual obligation of the state, and was enforced earlier this decade by the courts when the state attempted to reduce the contribution in one year.

Ask Jack Jack Ehnes

Can my annual benefit adjustment be reduced or eliminated?

State law provides for an automatic annual benefit adjustment of 2 percent of the initial monthly benefit, after the benefit recipient has been receiving a benefit for at least one year. The payment of this annual benefit adjustment is not tied to changes in the cost of living; it is made whether the cost of living increases or decreases.

Ask Jack Jack Ehnes

How much will my contributions go up, how fast? When? Who decides?

This is a policy decision. Ultimately, the Legislature and the Governor, will determine when, how much and how quickly contributions will increase through legislation. However, based on current assumptions and projections, to be fully funded in 30 years, contributions would have to increase.

Ask Jack Jack Ehnes

Should I pay attention to all of the news about CalSTRS pension losses?

In one word, the answer is yes. This is important to you because this affects the future of your retirement, and whether you, your employer or the state end up paying the direct cost of higher contributions. What’s being discussed today will likely affect the compensation you earn in the future. Visit this website often to get up-to-date information and stay connected with CalSTRS.