Trustees of the $126 billion CalSTRS voted on Feb. 3 to oppose efforts to close its defined benefit plan to new employees and replace it with a defined contribution plan, as proposed in legislation by Assemblyman Keith Richman and endorsed by California Gov. Arnold Schwarzenegger.
"Under the CalSTRS defined benefit program, our members cannot outlive their benefit. Simply put, changing to a defined contribution plan would rob them of that security," said Gary Lynes, board chairman.
The board also voted to oppose Mr. Schwarzenegger's proposals to shift the responsibility of $469 million in state contributions to school districts and teachers. Mark O. Johnson, consulting actuary with Milliman USA, said, "This proposal is unsound," adding that CalSTRS would eventually require more funding.