WEST SACRAMENTO, CA – In response to the proposed Pension Reform Act of 2014 ballot initiative allowing employers to alter the future retirement benefits of current public employees, the California State Teachers’ Retirement System’s Chief Executive Officer Jack Ehnes, issued the following statement:
“This initiative, which raises legal concerns that CalSTRS currently is exploring, threatens the retirement security of existing and future educators, who have provided many years of service to California’s students.
“California’s educators are overwhelmingly women, do not participate in Social Security, retire on average around age 62, generally do not receive employer-funded health care benefits after age 65, and earn a retirement income that replaces only about 56 percent of their salary. Any further reduction in the already modest benefits of educators significantly jeopardizes decades of hard-earned retirement income California’s teachers have come to depend upon.
“The contributions paid by CalSTRS members, employers and the State are sufficient to cover the ongoing costs of the benefit program. Instead, CalSTRS most pressing issue stems largely from the worst economic downturn since the Great Depression and remains unresolved. Legislative action to address the CalSTRS $70 billion unfunded liability is still the most fiscally responsible approach needed to uphold the state’s promise to California’s educators. On behalf of CalSTRS, I would like to express profound disappointment that the proponents of the initiative distort this issue to increase uncertainty for public servants about their retirement future.”
The California State Teachers’ Retirement System, with a portfolio valued at $165.9 billion as of August 31, 2013, is the largest educator-only pension fund in the world. CalSTRS administers a hybrid retirement system, consisting of traditional defined benefit, cash balance and voluntary defined contribution plans. CalSTRS also provides disability and survivor benefits. For 100 years, CalSTRS has served California’s public school educators and their families, who today number 862,000 from the state’s 1,600 school districts, county offices of education and community college districts.