California Gov. Gray Davis proposed deferring $948.4 million in pension contributions to the $100 billion California State Teachers Retirement System, Sacramento, over the next two years as part of a package to plug a $12.5 billion state budget deficit. The governors proposal also includes a previously reported proposal to delay $1.1 billion in contributions to the $147 billion California Public Employees Retirement System, Sacramento.
Under the governors proposal, the state will make an additional contribution to a supplemental defined benefit plan started last year by CalSTRS. Currently, one-quarter of participants retirement contributions, totaling 8% of pay, go into the new plan for a 10-year period. Details of the proposal have yet to be negotiated.
Separately, CalSTRS is seeking information on leveraging its $5 billion real estate portfolio, possibly leading to an advisory role in managing the systems real estate debt. The system recently boosted its target real estate allocation to 7% from 5%.