Our Fiduciary Responsibility Comes First
The Teachers’ Retirement Board has a fiduciary responsibility—the primary responsibility—to make certain your retirement fund is secure.
What Is a Fiduciary?
Fiduciaries act on behalf of other people in a relationship of trust and confidence. They must act for the sole benefit of those they represent at all times. Fiduciaries are required to be loyal and committed to the people they act for and must never put their own interests first.
Teachers’ Retirement Board Is a Fiduciary
The law sets a high standard for the conduct of the Teachers’ Retirement Board as a fiduciary. California’s Education Code calls on the Board and its members to act only in the interest of CalSTRS members and beneficiaries for the purpose of providing benefits. They must carry out our duties with care and diligence. As a fiduciary, the Board must act with more than the simple skill of a reasonable person; they must act with the degree of skill used by a prudent person under similar circumstances. Such decision-making requires careful investigation and thorough consideration. It is simply not sufficient for a fiduciary to say that a poor decision was made in good faith.
What Fiduciary Responsibility
CalSTRS core responsibility is to provide benefits and services to educators in public schools and community colleges. As a fiduciary, each board member is to perform duties and make decisions to guide the system solely for the benefit of CalSTRS members and to do so in an economical manner.
That means each member must think of how the decisions they are asked to make will benefit the members of the system first, before all other considerations. The Teachers’ Retirement Board members take their fiduciary responsibility very seriously and make their decisions accordingly. Know that the Board and CalSTRS staff value your trust.
Our Fiduciary Responsibility in Action
The stance the Teachers’ Retirement Board took on divestment legislation is a good example of fiduciary responsibility in action. We ensured there was language in the legislation stating that if the Board believed divestment would breach their fiduciary responsibility, CalSTRS would not have to divest.
No matter how difficult a decision may be, the Board’s decisions are always based on the financial soundness of the system and the fiduciary duty to you.