CalSTRS Benefits Secure Despite Economy

What's New

In these troubled times, CalSTRS recognizes that our members may have questions regarding the security of their benefit payments and what is being done to protect them.

While these are valid concerns, there are a few points to take into consideration:

CalSTRS Benefits Are Secure

Members need to know that benefits do not depend on the funds in the CalSTRS investment portfolio or the amount in their CalSTRS account. Benefits are calculated with a formula based on a member’s:

  • Age at retirement
  • Years of service
  • Highest compensation amount

Rest assured, benefits will not change with the downturn in the economy. CalSTRS benefit payments are guaranteed by both state and federal law. Even during the worst of times in CalSTRS 95-year history, a benefit payment has never been missed and never will be.

CalSTRS Investments Are Strong

CalSTRS is a patient, long-term investor, prepared for the coming recovery. Our investments are rock solid and built to withstand any downturns in the economy.

One of the best defenses against an economic downturn is a well-diversified portfolio. At CalSTRS, our assets are invested worldwide in:

  • U.S. stocks
  • International stocks
  • Bonds and other fixed income securities
  • Real estate
  • Private equity

CalSTRS is Taking Steps to Maintain a Healthy Portfolio

Remember, benefits will not change with the downturn in the economy. Even so, CalSTRS has taken a disciplined approach towards maintaining a healthy portfolio. A few of the steps taken are:

  • Staying focused on long-term goals by maintaining a broadly diversified portfolio.
  • Preserving cash and other safe investments.
  • Expanding asset class ranges.
  • Offering mortgages to teachers.
  • Seeking opportunities for well-priced investments.

These are troubled times for everyone, but recovery is coming. Have no doubt, benefits will continue to be paid, the CalSTRS portfolio will remain solid and, in the end, CalSTRS will continue “Securing the financial future and sustaining the trust of California’s educators”.