When Gov. Jerry Brown talks about paying down the state’s “wall of debt,” he doesn’t mention the state teachers’ retirement system. And yet the towering $73 billion unfunded shortfall in the state pension fund for teachers and administrators, the California State Teachers’ Retirement System, makes Brown’s wall, at about $30 billion, look like a picket fence.
On Wednesday, at a joint legislative information hearing, speakers from CalSTRS, groups representing educators, and the Legislative Analyst’s Office urged the Legislature to act now to address the outstanding liability. If nothing is done, CalSTRS won’t have enough money to cover the retirement benefits it promised to the teachers and administrators who will one day be drawing it down. Fully restoring the financial health of the pension fund will be tremendously expensive – requiring $4.5 billion to $5 billion annually in additional contributions, primarily by school districts and the state.