Sixth annual sustainability report highlights improvements in funding, expanded member outreach and low-carbon transition preparedness.
News release | Vanessa Garcia
WEST SACRAMENTO, Calif. (January 23, 2020) – The California State Teachers’ Retirement System today released its 2018–19 Sustainability Report. The report meets the guidelines established by the Global Reporting Initiative (GRI), the first and most widely adopted standards for sustainability reporting.
In 2015, CalSTRS became the first U.S. public pension fund to meet GRI standards in its reporting. The report highlights CalSTRS’ sustainable practices and performance, including overviews of stakeholder, employee and member engagement.
“Through measuring, understanding and communicating our sustainability practices, we can better manage economic, social, environmental and governance risks and opportunities,” said Chief Executive Officer Jack Ehnes. “CalSTRS’ commitment to long-term sustainability is critical to fulfilling our promise of a secure retirement to more than 964,000 members and their beneficiaries.”
Path to full funding
CalSTRS’ primary goal is to ensure a financially sustainable trust fund for its members and beneficiaries. Through the shared commitment by members, employers and the state, the CalSTRS Defined Benefit Program is expected to reach near full funding by 2046.
- Supplemental payments provided by the State of California in 2019 are estimated to save $7.4 billion for the state and $5 billion for employers through 2046.
- The funded ratio—the amount of assets on-hand to pay benefits—improved from 62.6% to 64.0%.
Member retirement preparedness
CalSTRS engages and educates members to help them understand their defined benefit and supplemental savings options to meet their retirement income goals.
- Member outreach was expanded with the opening of two new member service centers in Fresno and Redding, serving the Central Valley and Northern California.
One of CalSTRS’ most critical activities is to secure member and organizational data.
- There were no reportable breaches of member privacy.
Portfolio readiness for the low-carbon transition
CalSTRS understands climate change poses physical and transition risks to its investment portfolio and is taking steps to mitigate risk. Significant investment opportunities also exist in helping the global economy mitigate and adapt to a changing climate.
- The Teachers’ Retirement Board Investment Committee approved new policy language within the board’s Corporate Governance Principles to support the low-carbon transition.
- Along with 477 other global investors, CalSTRS called on world governments to accelerate private sector investment into the low-carbon transition to achieve the goals of the Paris Agreement.
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CalSTRS provides a secure retirement to more than 964,000 members whose CalSTRS-covered service is not eligible for Social Security participation. Members retire on average after more than 24 years in the classroom with a monthly benefit of approximately $4,547. Established in 1913, CalSTRS is the largest educator-only pension fund in the world with approximately $254 billion in assets under management. CalSTRS demonstrates its strong commitment to long-term corporate sustainability principles in its annual Global Reporting Initiative Sustainability Report. For more information, visit CalSTRS.com.