MOU Fiscal Analysis: Bargaining Units 10 (Professional Scientists) and 18 (Psychiatric Technician)

Sep 9, 2025 - Twice each year through June 30, 2028, the parties would discuss methods and opportunities to improve the state ’s ability to recruit and retain Unit 18 members. Contracting Out. Twice a year, the parties would meet to examine existing personal services contracts that call for services found in Unit 18 class specifications.
https://lao.ca.gov/Publications/Report/5073

MOU Fiscal Analysis: Bargaining Unit 6 (Corrections)

Jun 23, 2025 - If the agreement is not ratified, that $206.8  million would be invested in the prefunding trust fund and given the next two decades to grow. If the fund averaged an annual return of 5  percent over the next 20 years, the $206.8  million would more than double to nearly $550  million.
https://lao.ca.gov/Publications/Report/5058

MOU Fiscal Analysis: Bargaining Unit 16 (Physicians, Dentists, and Podiatrists)

Jul 14, 2025 - The reduced amount of money invested in the trust fund will result in higher unfunded liabilities in the long-run. In most of the agreements, the state ’s contributions towards the benefit would be fully restored in 2027-28.
https://lao.ca.gov/Publications/Report/5064

The 2024-25 Budget: Proposition 2 Debt Payment Proposals

Mar 20, 2024 - CalSTRS is the world ’s largest educator ‑only pension system, administering the $315  billion Teachers ’ Retirement Fund for more than 1  million members and beneficiaries (as of June 2023). CalSTRS ’ 12 ‑member Teachers ’ Retirement Board (CalSTRS Board) administers the fund and is constitutionally responsible for overseeing the system ’s investment policies and ensuring that benefit payments are made on time and according to law.
https://lao.ca.gov/Publications/Report/4887

MOU Fiscal Analysis: Bargaining Unit 6 (Corrections)

Sep 7, 2023 - The primary difference between the two plans is (1)  who makes investment decisions and (2)  who bears the risk of investment losses. In the case of a defined benefit plan, the employer chooses how the funds are invested and bears all the risk of investment loss —the employee is provided a guaranteed annuity in retirement.
https://lao.ca.gov/Publications/Report/4800

MOU Fiscal Analysis: Bargaining Unit 8 (Firefighters)

Aug 19, 2025 - As such, if the state were to incorporate a DROP as part of its compensation package to Uni t 8 members, the state would bear the risks associated with the program (for example, if actual investment returns fell short of the interest rate applied to funds in a DROP account).
https://lao.ca.gov/Publications/Report/5066

Strengthening the CalSTRS Funding Plan

Mar 10, 2021 - Simplifying these aspects of the funding plan could help improve legislative oversight, lessen the volatile effects of investment returns on the state ’s actuarially required contribution rate, and align impacts of investment returns across the state ’s and employers ’ actuarially required contribution rates.
https://lao.ca.gov/Publications/Report/4400

MOU Fiscal Analysis: Bargaining Unit 12 (Craft and Maintenance)

Jun 27, 2025 - Suspension of Employer and Employee OPEB Contributions Missed Opportunity to Improve OPEB Prefunding Arrangement. We long have been critical of the state ’s retiree health prefunding strategy. We have found that establishing a benefit that fundamentally has no bearing on an employee ’s salary to be funded as a percentage of pay is overly complicated and creates risk that the benefit will not be fully funded by the target date.
https://lao.ca.gov/Publications/Report/5060

The 2025-26 Budget: Concession Bargaining

May 19, 2025 - The first is payment towards the “normal cost, ” which is the amount of money that actuaries determine (based on actuarial assumptions like expected investment returns on assets) must be contributed to prefund the benefit earned by employees today.
https://lao.ca.gov/Publications/Report/5047

MOU Fiscal Analysis: Bargaining Unit 5 (Highway Patrol)

Aug 23, 2024 - The normal cost is developed using various actuarial assumptions including assumptions about investment returns on assets and the life expectancy of members. Under the Public Employees ’ Pension Reform Act of 2013, the state has a standard —implemented through the collective bargaining process —that the state and its employees each pay one-half of the normal cost.
https://lao.ca.gov/Publications/Report/4920