The California Teachers Retirement System, or CalSTRS, is facing a significant unfunded liability with respect to its Defined Benefit Program. CalSTRS has a shortfall in funding of approximately $71 billion and will run out of funding for the program by 2046 if no changes occur. If this happens, it hurts hard-working teachers in our state as well as taxpayers and our education system.
The best solution to fix the shortfall is one that is fair to all stakeholders involved: school districts, the state and teachers. I committed along with the Speaker of the Assembly and the Assembly Democratic Caucus to push to implement a permanent, ongoing solution to the funding shortfall in CalSTRS this year.
As chair of the Assembly Committee on Public Employees, Retirement and Social Security, I will begin this process next week by having the first of a series of hearings on Wednesday, Feb. 19.
This first hearing – “Addressing the California State Teachers’ Retirement System’s Long-Term funding Needs” – will build upon a joint hearing my committee held last year with the Senate by updating and reevaluating the information we received and getting current perspectives on the issue from the various stakeholder groups, including representatives from CalSTRS, the California Teachers Association and the Association of California School Administrators.
Future hearings will focus on the significant issues that must be resolved before a solution can be reached, such as the impact employer increases will have on Proposition 98 funding and how the vested rights of members affect the ability to increase current member contributions.
It is important to keep in mind as we move forward in this discussion that the CalSTRS retirement benefit is the primary, and often the only, source of ongoing guaranteed retirement income paid to a teacher in California because California’s public educators do not earn Social Security benefits for their public education service. This fact alone makes it all the more important for us to ensure the long-term stability of CalSTRS.
The goal of this process is to enact a funding plan that achieves full funding over the next several decades – thus enabling CalSTRS to pay the benefits owed to members while taking into consideration the impact higher contributions will have on state, school and teachers’ budgets.
I am eager to begin this process and confident that an equitable and permanent solution can and will be found to the CalSTRS funding problem through these hearings and my introduction of AB 611, which I hope will eventually be the vehicle for a permanent, ongoing funding solution.
My end goal and the end goal of our state is to guarantee that CalSTRS is 100 percent funded. Ensuring the long-term financial security of California’s hard-working and dedicated teachers is a goal I am hopeful we can achieve this year.
Assemblyman Rob Bonta represents the 18th Assembly District, which includes Oakland, Alameda and San Leandro, and is chair of the Assembly Committee on Public Employees, Retirement and Social Security.