By Dale Kasler
Published: Thursday, Apr. 3, 2014 – 11:00 pm
Last Modified: Thursday, Apr. 3, 2014 – 11:12 pm
CalSTRS said Thursday that its long-term funding shortfall has risen to $73.7 billion, a stark reminder of the financial issues facing the teachers’ pension fund.
The newest tally reflects CalSTRS’ financial condition as of last June 30. The pension fund said the shortfall grew by $2.7 billion in the 12 months since the previous valuation of June 30, 2012.
CalSTRS’ latest calculation comes as the Legislature and Gov. Jerry Brown continue to debate how to fix the teachers’ retirement fund. Brown originally said the Legislature could enact a funding plan for CalSTRS in 2015, but he also supported the decision by Senate and Assembly committees to hold hearings last month on the issue.
Two months ago, CalPERS approved a plan to raise contribution rates from state and local agencies to deal with a long-term shortfall of around $100 billion. Unlike the public employees’ pension fund, however, the teachers’ fund needs the Legislature’s permission to implement a rate hike.
The California State Teachers’ Retirement System has been struggling financially for some time and was badly wounded by the 2008 market crash. It has enjoyed recent investment gains, and the worsening of its long-term deficit has actually moderated; it had earlier forecast that the gap would grow by almost twice as much as it did.
Nonetheless, the fund insists the Legislature must act.
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