CalSTRS staff proposed increasing pension contributions starting July 2009 to eliminate the pension fund's $20.3 billion unfunded liability by June 30, 2038. The greatest burden would fall on school districts, which would face increases ranging from $227 million to $1.1 billion a year, depending on which of nine proposed scenarios is chosen. The state would also contribute an additional $125 million to $536 million a year. Participant contributions would go up by 0.5 percentage points to 8.5% of pay; for a medium-salaried employee, the net cost would range from $350 to $1,051 per year.
Staff of the $142.2 billion California State Teachers' Retirement System, Sacramento, rejected cutting benefits.
The CalSTRS board will review the proposal at its Sept. 8 meeting. Any change in contribution levels would require approval of the state legislature and Gov. Arnold Schwarzenegger.