CalSTRS underfunded by $42.6 billion
By Randy Diamond | January 27, 2010 5:57 pm
CalSTRS' investment losses have left the system underfunded by $42.6 billion, with almost double the unfunded liabilities it had estimated 19 months ago.
In a report on the $131.9 billion system's website, Jack Ehnes, CEO of the California State Teachers' Retirement System, estimated its defined benefit program would run out of money by 2045 without an increase in contributions by school systems, the state of California or teachers.
Mr. Ehnes says CalSTRS has no authority to impose such an increase, unlike pension plans in other states. Instead, he says the California Legislature must approve such an increase, but he concedes that action this year is unlikely given the political climate and California's $20 billion budget deficit.
Mr. Ehnes says CalSTRS plans to continue an education campaign to persuade legislators to take action in 2011.
The report is scheduled to be discussed at CalSTRS' board meeting on Feb. 5 in West Sacramento.