Educators who retired before 1999 will receive a special increase between 5% and 15% to their supplemental payment to maintain their purchasing power, according to Chief Executive Officer Cassandra Lichnock’s report to the Teachers’ Retirement Board.

The increase for almost 46,000 educators is a result of Senate Bill 868 (Cortese) and is in addition to their regular increases to help them keep up with higher-than-normal inflation.

Each year, CalSTRS assesses the level of purchasing power for retirees. Eligible members automatically receive Supplemental Benefit Maintenance Account (SBMA) benefits as part of their pension and do not need to contact CalSTRS for enrollment. Quarterly supplemental payments are issued on or about January 1, April 1, July 1 and October 1 each year.

Purchasing power is a measure of how a member’s retirement benefit keeps pace with inflation. For example, if a member’s benefit stays the same but prices double, the purchasing power is only 50% of what it originally was. Based on inflation, SBMA increases member benefits to maintain 85% of a member’s initial purchasing power.

SBMA is one of the strongest anti-inflation programs operated by any public pension in the nation. Its goal is to provide supplemental payments to retirees. The amount of the supplemental payment is based on inflation as measured by changes in the All-Urban California Consumer Price Index, which is calculated by the Division of Labor Statistics and Research in the California Department of Industrial Relations. Each year, CalSTRS calculates the inflation for the previous fiscal year and assesses the level of purchasing power for CalSTRS retirees.

The special increase helps ensure that CalSTRS members who retired before 1999, and who receive comparatively less in benefits than their peers who retired in the early 2000s or after, will receive the fiscal support they need in today's economy.

CalSTRS’ team worked swiftly and efficiently to ensure the special increase would be included in the quarterly supplemental payments that will be issued on or about October 1.

Other highlights from Lichnock's CEO report include:

Retirements update

For the second year in a row, CalSTRS saw a decrease in the number of members who retired.

In the 2022–23 fiscal year, 11,262 members retired, down from 2021–22, when there were 12,918 retirements, and 2020–21, when there were 13,558.

The latest decrease was anticipated because of the demographics of the CalSTRS membership. Demographics refer to characteristics such as age and years of service credit. Although demographics are one of the key factors driving the number of retirements, other external factors, such as economic conditions, can have a significant short-term impact as well.

The number of retirements includes both active and inactive members (those with no reported CalSTRS service for at least one prior fiscal year).

Ombuds report

The CalSTRS Office of the Ombuds assists members in resolving problems and conflicts that are not solved through the usual CalSTRS channels.

The office serves as an advocate for members and participants and is celebrating its 40th year providing feedback to executive leadership. It serves as a valuable early warning system for CalSTRS to identify trends and ensures CalSTRS’ values and mission are upheld.

The Ombuds office remains committed to its guiding principles of independence, impartiality, confidentiality and informality.