CAlSTRS To Tackle $20 Billion Funding Gap With Higher Contributions

Last week the California’s Teachers’ Retirement Board took steps to close the California State Teachers’ Retirement System’s (CalSTRS) long-term funding gap of $20 billion. The board approved guiding principles CalSTRS staff will use to draft legislation (including no decrease to member benefits, a mechanism to provide financing for retiree health care and sharing any necessary increases in contributions among the members, school districts and the state), though any change to the system must be signed into law by the Legislature and Governor Schwarzenegger. In a press release, CalSTRS said that any increase in contributions would be done incrementally over time and begin no earlier than July 1, 2009.