Plan Funding

Plan funding


The CalSTRS Funding Plan, enacted in Assembly Bill 1469 as part of the 2014-15 budget, puts the CalSTRS Defined Benefit Program on the path to full funding in 32 years through incremental shared contribution increases among the program’s three contributors: CalSTRS members, employers and the state.


CalSTRS Funding Plan

Decade-long efforts to bridge the Defined Benefit Program’s funding gap concluded with a plan that puts the CalSTRS Defined Benefit Program on the path to full funding in 32 years. Assembly Bill 1469, enacted as part of the 2014-15 budget, increased member, employer and state contributions over several years and sets the program on a sustainable course.


History of action

The CalSTRS Funding Plan is the result of years of focused discussions, stakeholder outreach, legislative visits and hearings. Since 2006, guided by the Teachers’ Retirement Board, CalSTRS committed to promoting the development of a comprehensive strategy to address the long-term funding needs of the system.


Economic downturn impact on funding

CalSTRS’ unfunded actuarial obligation primarily resulted from lower than expected investment returns stemming from the 2008 global financial market collapse coupled with the 2001 dot-com bust. In fiscal year 2009 alone, the fund experienced a 25% loss.

However, provisions in the CalSTRS Funding Plan (AB 1469, Bonta) have considerably increased the likelihood of CalSTRS reaching full funding while reducing the risk of a low-funded status or even running out of money.