CalSTRS' investment losses have left the system underfunded by $42.6 billion, with almost double the unfunded liabilities it had estimated 19 months ago.
In a report on the $131.9 billion system's website, Jack Ehnes, CEO of the California State Teachers' Retirement System, estimated its defined benefit program would run out of money by 2045 without an increase in contributions by school systems, the state of California or teachers.
Mr. Ehnes says CalSTRS has no authority to impose such an increase, unlike pension plans in other states. Instead, he says the California Legislature must approve such an increase, but he concedes that action this year is unlikely given the political climate and California's $20 billion budget deficit.
California teachers already contribute a higher percentage of their income to CalSTRS than workers contribute to social security. There have been proposals in the past to increase all three components: the state's contribution, the school district's, and the teacher's. Expect to see such proposals revived.