CalSTRS funding level is projected to decline steadily to 78.1% by June 30, 2011, from 98% as of June 30, 2001, according to the median of a preliminary asset-liability study developed by the funds external actuary, Milliman.
The mean return projection is higher, but still falls short of the pension funds actuarial assumption of 8%. If the mean projection were met, the funding level of the $92 billion California State Teachers Retirement System, Sacramento, would drop to 84.2% by June 30, 2011.
The results, which CalSTRS spokeswoman Sherry Reser cautioned are preliminary, could cause the CalSTRS board to reconsider its strategic asset mix or develop options for further modeling, a Milliman analysis said. The target asset mix now is 61% equities, 27% debt, 6% real estate, and 6% private equity. The pension funds investment committee will review the findings on Wednesday.