California Teachers’ Pension Fund Earns 13.35 Percent for the Year

News release

Sacramento, CA -The California State Teachers’ Retirement System recorded a 13.35 percent return on its investments for the past year. CalSTRS’ assets totaled $99.9 billion on June 30, 1999 – an $11.8 billion increase from the previous 12-month period.

This is the fifth straight year for double digit returns and CalSTRS’ best showing compared to most large pension funds. CalSTRS outperformed 91 percent of public and corporate pension funds with more than $1 billion in assets according to the Trust Universe Comparison Service. The service, which measures relative performance of pension funds, reported CalSTRS’ peer group had a median investment return of 10.80 percent.

“This terrific return can be attributed to hard work, experience, skill, preparation and providence,” said CalSTRS Chief Investment Officer Patrick Mitchell. “Credit should also be given to a solid strategic investment plan designed by the Teachers’ Retirement Board.”

The strong performance was primarily driven by the domestic and international stock markets. As of June 30, CalSTRS had 46 percent of its assets in domestic stocks and 24 percent in international stocks. Returns were 19.3 percent and 12.9 percent respectively.

CalSTRS held 25 percent of its assets in domestic bonds, which posted a 1.5 percent return. Real estate, alternative investments and cash totaled 5 percent of the investment portfolio and had returns of 21.2 percent, 16,4 percent and 5.9 percent respectively.

“Our continued good financial news opens wide the door to more opportunities for benefit improvements while guaranteeing the strongest possible Teachers’ Retirement Fund for the future,” said Teachers’ Retirement Board chair Emma Zink.

The outstanding investment return is the third major financial milestone achieved this year. First, in April CalSTRS announced the latest actuarial valuation showed it had 104 percent of the funds needed to pay the cost of the benefit plan in effect in 1998 without additional outside funds from the state. In July the pension fund exceeded the $100 billion mark for the first time.

Established by law in 1913, CalSTRS provides retirement benefits to California’s public school teachers from kindergarten through community college. As of June 30, 1998, CalSTRS had 447,378 active and inactive members and 157,747 benefit recipients, including retired members, survivors and disabled members. More information on CalSTRS is available at its Web site,