Time for a Reality Check
Recent media reports have brought attention to the funding challenges facing CalSTRS. They inaccurately suggest, however, that CalSTRS is on the brink of running out of funds and cannot meet its obligations.
While it is true that the system has a funding shortfall, current projections show we have assets to pay benefits for at least the next 30 years. Your CalSTRS pension fund is not in immediate crisis.
Even if in the unlikely event that CalSTRS does run out of money in the 2040s, the benefits would continue to be paid because the state would be obligated to pay the difference between the benefits paid and the contributions received.
Long-term solution for a long-term problem
However, the funding shortfall is a long-term problem and can be managed. The solution requires thoughtful action. The Legislature and Governor must adopt a responsible funding plan that will protect the state General Fund and uphold the state’s promise to teachers.
What is needed is an increase in contribution rates, which can be gradual and predictable. Those rates have not increased in decades and can only be changed by the Legislature and the Governor.
CalSTRS is working with the stakeholders – school district employers, members, legislators and the Governor — to facilitate development of a solution to ensure the long-term sustainability of CalSTRS.
For more than 97 years CalSTRS has provided retirement security for generations of California educators while never missing a payment—even through the Great Depression. That rock solid dependability is secure.