A Message for California’s Educators
When we talk about CalSTRS we’re talking about a financial institution that dates back to 1913. Through the years, the fund has endured many difficult times and changes. This last decade has been particularly turbulent for CalSTRS, but we have never lost sight of our mission to provide a secure retirement to California’s educators.
This year, the Governor and the Legislature made CalSTRS’ financial security a priority by passing Assembly Bill 1469, which enacts a plan to close the CalSTRS funding gap. This landmark legislation funds the Defined Benefit Program through gradual contribution increases shared by the state, CalSTRS members and their employers. It offers a reasonable and sound approach to fully fund the program within 32 years; a methodology consistent with actuarial and accounting principles.
As the author of AB 1469, Assembly Member Rob Bonta, shepherded the bill through several legislative hearings and played a critical role in its process. We sat down to speak with him about this accomplishment and he asked us to share a message with California’s educators.
Passage of this bill concludes a decade-long effort to raise awareness of the need to sustain the fund and enact a plan to achieve it. More importantly, the solution proves that defined benefit pension plans are effective and viable when funded properly and invested prudently. With a solid financial plan in place, the fund is on course to fulfill its mission to provide a secure retirement to California’s educators.
More than 100 years ago, the Legislature established the Teachers’ Retirement Fund as a means to provide a secure retirement to the devoted educators of this state, and keeping that promise has been no simple task. CalSTRS commends the Legislature, the Governor and our stakeholders for their leadership in this tremendous accomplishment.