Readying CalSTRS for Economic Recovery
This past year the Teachers’ Retirement Fund lost significant value from a high in June 2008. We’re not alone – these have been tough times for everyone. Pension funds and markets worldwide have experienced negative effects due to the international economic crisis.
Investments Poised for Recovery
Despite the losses suffered by public pension funds, defined benefit pensions like CalSTRS remain the bulwark of our economy with trillions of dollars in the marketplace. As patient long-term investors, we are designed to withstand market turmoil.
CalSTRS acted to manage market volatility and to take advantage of opportunities presented by the financial meltdown. CalSTRS investments are poised for recovery following the economic crisis. Proactive steps taken at the height of the crisis have helped prepare CalSTRS for the emerging economic recovery.
Increased Contributions Needed
While investment earnings are the single largest source of funds to pay benefits, the historic market declines show investments alone cannot close the funding gap. Closing the gap will require future legislative action to increase contributions made by school districts and the state. The Teachers’ Retirement Board is working together with stakeholders to address this long-term benefits funding shortfall. We are not in an emergency requiring us to resolve the contribution gap immediately, but the sooner a solution is found, the lower the cost.
Understand Your CalSTRS Benefit
The recent economic downturn has brought the topic of public pensions to the forefront of media dialog. Although these are difficult times, they present us with a chance to educate new and long-term members about the CalSTRS retirement benefit. Whether you’ve just begun your teaching career or are a seasoned veteran, CalSTRS can help you plan your financial future.
Feel free to leave a comment to continue the discussion or if you have questions, feel free to write me in our Q&A section, Ask Jack.
By Jack Ehnes, CalSTRS CEO