California State Teachers' Retirement System said Tuesday it recorded a 6.8% net return for the fiscal year ending June 30, surpassing its 6.5% benchmark.
CalSTRS also beat its benchmark in the prior fiscal year, with the $236.9 billion pension plan earning a 9% net return for the 12-months ended June 30, 2018, outperforming its 8.6% benchmark return. The West Sacramento-based pension plan returned an annualized 9.7% for three years, 6.9% for five years, 10.1% for 10 years, 6.2% for 20 years and 8% for 25 years ended June 30. CalSTRS surpassed its 7% return assumption in the three-year, 10-year and 25-year periods.
Private equity, at 10.5%, had the highest fiscal year return, besting its 9.6% benchmark, followed by 9.2% for innovative strategies, compared to its 5.1% benchmark. Risk-mitigating strategies produced an 8.3% fiscal year return, compared to its 7.2% benchmark, while real estate returned 8.2% vs. a 6.5% benchmark. Fixed income with an 8.1% returned edged out its 7.9% benchmark. The two lowest performing asset classes for fiscal year 2019 were public equity with 5.3% slightly above its 5.2% benchmark and the inflation-sensitive asset class at 6%, which well surpassed its 2.4% benchmark.
CalSTRS is currently 64% funded.
A funding plan adopted by CalSTRS in 2014 includes $5.1 billion in fiscal year 2020 state supplemental pension payments. The plan aims to have CalSTRS on track to full funding by 2046.