CalSTRS Board Opposes New Pension Legislation
Sacramento, CA – The Teachers’ Retirement Board voted to oppose Assembly Constitutional Amendment 23 at its meeting today. The bill by Assembly Member Keith Richman (R-Northridge) would effectively close the current CalSTRS defined benefit plan to public school educators hired after July 1, 2007. Those newly hired employees could only choose between one of two retirement plans, a 401(k)-style plan or a 401(k) style plan combined with a defined benefit plan.
The board members’ opposition to the bill centered on the threat it presents to the financial stability of the trust fund. Under the proposal, the current plan would be closed to contributions from new members, thereby affecting the long-term funding of benefits.
“We are very disheartened to see this type of legislation come before the board again as a similar bill was presented and summarily opposed by this body earlier this year,” said Carolyn Widener, CalSTRS board chair. “The Teachers Retirement Board must oppose any bill that strips the fund of its ability to provide a secure financial future for our members.”
CalSTRS, at $132 billion, 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 755,000 members and their families.