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A Review of the CalSTRS Funding Plan: Theoretical Investment Gains Have Shifted Unfunded Liabilities to Districts


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[PDF] CalSTRS Funding: An Update

May 5, 2017 - The CalSTRS board recently acted to change assumptions used to estimate its unfunded liabilities, including the key assumption about future investment returns--sometimes referred to as the "discount rate." These and other recent developments have eroded CalSTRS' funding situation. This brief details these changes and describes how they will affect the state, school and community college districts, and teachers

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A Review of the CalSTRS Funding Plan: State’s Future Responsibility for CalSTRS Uncertain

February 2, 2016 - This post is the fifth in a series looking at the implementation of the CalSTRS funding plan. In this post, we describe how the state’s share of CalSTRS’ unfunded liabilities will be more sensitive to investment gains and losses than the district share.

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A Review of the CalSTRS Funding Plan: CalSTRS Funding Plan Relies on Abstract Calculation

February 2, 2016 - This post is the second of a series looking at the implementation of the CalSTRS funding plan. In this post, we critique the complex calculation central to the funding plan.

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A Review of the CalSTRS Funding Plan: Funding Plan May Not Meet Principle of “Shared Responsibility”

February 2, 2016 - This post is the sixth in a series looking at the implementation of the CalSTRS funding plan. In this post, we describe how the plan might fall short of meeting the principle of “shared responsibility,” a key goal of the Legislature in passing the plan. Specifically, we explain how the state may not incur higher costs under the funding plan.

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A Review of the CalSTRS Funding Plan: Treatment of Teacher Contributions Also Increase District Unfunded Liabilities

February 2, 2016 - This post is the fourth in a series looking at the implementation of the CalSTRS funding plan. Our third post explained how theoretical asset gains have increased the school and community college district share of CalSTRS’ unfunded liabilities. In this post, we continue this discussion by describing how CalSTRS’ treatment of teacher contributions has also increased the district share.

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A Review of the CalSTRS Funding Plan: Conclusion

February 2, 2016 - This post is the eighth in a series looking at the implementation of the CalSTRS funding plan. In this post, we offer some concluding thoughts.

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Update on the Progress of the CalSTRS Funding Plan

November 18, 2021 - This post provides an update on the progress of the California State Teachers’ Retirement System (CalSTRS) funding plan. The post: (1) describes the changes to unfunded actuarial obligation and contribution rates in 2021-22, based on the most recent actuarial valuation; (2) describes the potential effects of the 2020-21 investment returns; and (3) revisits the recommendations we raised in our March 2021 publication, Strengthening the CalSTRS Funding Plan, using the extreme volatility in investment returns to illustrate how those recommendations would strengthen CalSTRS’ ability to successfully pay down unfunded actuarial obligation—both the state’s share and employers’ share—by 2046.

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A Review of the CalSTRS Funding Plan: Background

February 2, 2016 - This post is the first of a series looking at the implementation of the CalSTRS funding plan. In this post, we provide key background information on pensions and CalSTRS.

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CalSTRS Funding Update

July 19, 2018 - In May 2018, the California State Teachers’ Retirement System (CalSTRS) released an update on the financial position of the pension system, which was largely in line with expectations. This post summarizes the update, which contains the latest estimates of the unfunded liability and contribution rates required for districts, employees, and the state.

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[PDF] Strengthening the CalSTRS Funding Plan

March 10, 2021 - This report provides an overview of the 2014 California State Teachers’ Retirement System (CalSTRS) funding plan, and analyzes the various challenges and complexities of the plan that have come to light that may impede CalSTRS’ ability to successfully eliminate the system’s unfunded actuarial obligation (UAO) by 2046. We offer several short- and longer-term recommendations for the Legislature to consider to help strengthen CalSTRS’ ability to eliminate current and future UAO, achieve long-term savings, and improve legislative oversight.