History of Plan Funding

Mar. 8, 2010 CalSTRS-ca
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CalSTRS is currently funded at 71 percent. Must CalSTRS be funded at 100 percent?

A valuation is like a home mortgage—there isn’t a need to have all the money today, but we should have a solution in place to pay these benefits in the future.

Current Funding

Mar. 8, 2010 CalSTRS-ca
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The Teachers’ Retirement Board approved a Comprehensive Funding Strategy that will guide the long-term effort towards fully funding the Defined Benefit Program. While our investment income goes a long way to maintaining the health of our fund, providing about 60 to 63 percent of the benefits paid, the Board realized the need to take additional steps to close the funding gap.

Funding Levels

Mar. 8, 2010 CalSTRS-ca
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CalSTRS is currently funded at 71 percent. CalSTRS Defined Benefit contributions are among the lowest in the United States.

Cost of Waiting

Mar. 14, 2010 CalSTRS-ca
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The longer we wait, the more difficult and costly the funding gap will be to solve. Based on current actuarial assumptions, CalSTRS actuaries project that the Defined Benefit Program will deplete its assets by the early 2040s.

At that time, the state of California—as the plan sponsor—would be obligated to fund benefits on a pay-as-you-go basis. The impact on the state General Fund is estimated in today’s dollars at $9 billion a year.

CalSTRS Board Presentation on the Unfunded Liability

Mar. 10, 2010 CalSTRS-ca
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