CalSTRS has a funding ratio well below what is fiscally sound, according to a report of various high-risk budget issues facing the state released Thursday by state Auditor Elaine Howle.
Ms. Howle's findings corroborate what CalSTRS' executive staff and board have said in the past that the pension fund is facing severe financial problems.
The CalSTRS board has been pressing the state Legislature in recent years to raise the required contributions to the pension fund, which is funded by teachers, school districts and the state. The pension fund's own actuaries project the retirement system will run out of money in about 30 years.
The report says that one of the issues with funding for the $170 billion California State Teachers' Retirement System, West Sacramento, is that, unlike the state's other large retirement plan, the $260.9 billion California Public Employees' Retirement System, Sacramento, the CalSTRS board does not have the authority to set contribution rates.
That issue as well as poor investment returns following the financial crisis have resulted in CalSTRS' funding ratio falling to 67% in 2012 from 98% in 2001, well below the 80% considered fiscally sound, the report says.
State taxpayers would be on the hook to fund the pension plan directly from the state budget if the system ran out of money because benefits to teachers are guaranteed under state law.
CalSTRS spokesman Ricardo Duran did not return phone calls seeking comment.
