CalSTRS Receives $500M Payment from State
Funds Transferred Following Appeals Court Decision
SACRAMENTO, CA – The California State Teachers’ Retirement System (CalSTRS) has received $500 million from the State of California for a skipped payment to its inflation-protection program, the Supplemental Benefit Maintenance Account (SBMA). The state transferred the funds following an August 30 appeals court decision, which held the state violated its obligation to California’s retired educators when it withheld the payment for the 2003-2004 fiscal year.
“The long-delayed payment of millions of dollars owed to the Teachers’ Retirement Fund is necessary to ensure the retirement security of California educators,” said Jack Ehnes, CalSTRS Chief Executive Officer. “The SBMA serves our members who are the longest retired and most dependent on CalSTRS benefits.”
The Third District Court of Appeal decision also called for the payment of interest, which CalSTRS estimates could exceed $200 million. A legislative appropriation will be required for the payment of interest.
In 2003, Governor Gray Davis signed Senate Bill 20, which withheld a $500 million payment to the SBMA that year. The SBMA currently funds quarterly payments to approximately 63,000 retired educators and their survivors when inflation erodes their monthly benefit below 80 percent of its original consumer purchasing power.
With a $169 billion investment portfolio, the California State Teachers’ Retirement System is the second-largest public pension fund in the U.S. It administers retirement, disability and survivor benefits for California’s 795,000 public school educators and their families from the state’s 1,400 school districts, county offices of education and community college districts. For more information on CalSTRS, visit www.calstrs.com.