Gov. Jerry Brown outlines his plan to fix the teacher pension fund’s $73.7- billion shortfall at a May 13 briefing. (Rich Pedroncelli / Associated Press)
May 21, 2014
When Gov. Jerry Brown released his plan for repairing California’s troubled teacher retirement system, his calculations assumed the pension fund would see investment returns of 7.5% over the next three decades.
But on Wednesday, Brown said it’s “highly unlikely” the fund will hit that target “on average, forever.”
“We have plenty of pension challenges ahead,” Brown said in a speech during a California Chamber of Commerce breakfast.
If the pension fund doesn’t meet the 7.5% goal for investment returns, Brown’s plan won’t be enough to fix the retirement system’s $73.7-billion shortfall.
The governor’s proposal, released earlier this month, would require the state, schools and school employees to contribute more to the pension fund, with schools bearing the brunt of the costs.
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