California Teachers’ Pension Fund Hits Record High

News release

Sacramento – The California State Teachers’ Retirement System announced today that its investment portfolio has reached an all-time high of $116.7 billion. This milestone surpasses its previous high by $166 million, which was set more than three years ago, on September 1, 2000.

The CalSTRS portfolio has rebounded more than $30 billion in the last 17 months, from a record low of $85.5 billion in October 2002. The fund has also seen its rate of return jump to 23.1 percent for calendar year 2003, after two years of negative returns.

This rebound happened while the U.S. stock market is still approximately 22 percent below its all-time high, as measured by the Russell 3000. The S&P 500 is still 24 percent below its all-time high.

Christopher Ailman, CalSTRS Chief Investment Officer, said he credits the achievement to the Teachers Retirement Board’s efforts to diversify the portfolio, prudent long-term policies and aggressive investment of more than $2 billion when the market was at the bottom.

“The technology bubble of 1999 decimated many people’s portfolios, but the board’s investment policies and philosophy proved we can weather storms,” Ailman said. “Discipline and diligence win over in the long term, and our focus is definitely long term. Our Investment staff saw opportunities others missed. We pumped $2 billion into America’s economy when other institutional investors were frozen with concern during times of scandal and war.”

Established by law in 1913, CalSTRS is the third-largest public pension fund in the United States. It provides retirement, disability and survivor benefits to California’s public school teachers from kindergarten through community college, serving more than 735,000 members and their families. CalSTRS is a defined benefit plan, with guaranteed, lifetime benefits, which are not dependent on the performance of the investment portfolio.