Defined Benefit Pensions Reward California’s Educators

UC Berkeley research shows California educators are better supported by CalSTRS’ Defined Benefit pension versus a 401(k)-style plan. Various other studies focus on teacher tenure data by using only young, new-hire turnover statistics in order to represent the majority of the educator workforce, which is inaccurate and misleading.

Here are the facts: Only 6 percent of California’s educators leave their jobs before vesting at the five-year mark. Additionally, 86 percent of active CalSTRS members stay in their careers until at least age 51, which is also when their DB pension becomes greater than a 401(k). Also, for committed teachers who begin at age 25 and retire at 55, the CalSTRS pension generates 21 percent more wealth than a 401(k).

CalSTRS’ DB pension is a powerful workforce retention tool supporting retirement futures for more than 914,000 California educators and their families for over 103 years.

Jack Ehnes, CEO
California State Teachers’ Retirement System