CalSTRS Expands Savings Investment Vehicles for Public School Employees
SACRAMENTO, CA – The California State Teachers’ Retirement System announced today an expansion of its supplemental retirement savings program with the addition of 457 and Roth 403(b) plans by late 2007. What this means for the more than one million California public school employees and their families is they will have more avenues to boost their retirement security.
“With the expansion of our supplemental retirement savings program, we are at the inception of an unprecedented change in how we serve our members. Never has the need been greater for reliable investment vehicles in an industry awash with a dizzying array of products,” said Jack Ehnes, CalSTRS chief executive officer. “Currently, CalSTRS members and other public school employees may have to choose from as many as 90 providers offering more than 1,000 various 403(b) products. We will offer a select group of top-quality retirement savings vehicles from a provider they trust.”
The pension system is increasing its supplemental, deferred compensation savings opportunities as part of its mission to help California’s teachers have a secure retirement. CalSTRS is the only guaranteed source of retirement income for many teachers, making the need for supplemental savings essential to maintain their lifestyle in retirement similar to their working years. The average career teacher’s CalSTRS pension replaces about 60 to 65 percent of pay, and a member does not earn Social Security for public school employment.
The enhanced supplemental savings program could include:
- the ability of investors to invest in a special fund option that mirrors the asset allocation of the CalSTRS portfolio, excluding real estate and private equity.
- assistance from registered investment advisors.
The expanded supplemental savings investment program will be available to all employees of a school district, not just to teachers. Additionally, CalSTRS helps all school district employees prepare for retirement by administering an online information bank for 403(b) products, 403bCompare.com. This site was created to help the employees make informed investment decisions by offering information about 403(b) products available in their district. There is an educational section, information about investment options, fees and product performance.
With a $159 billion investment portfolio, the California State Teachers’ Retirement System is the second-largest public pension fund in the United States. It provides retirement, disability and survivor benefits to California’s 800,000 public school educators and their families.