Report paints dire picture of teacher pension fund
The pension fund for California teachers and school employees will run out of money by 2044 if lawmakers don’t take drastic action, according to a new report from the Legislative Analyst’s Office.
The report said problems with the pension fund, known as CalSTRS, “may be state’s most difficult fiscal challenge.”
The costs are massive and growing. The latest estimate pegs the fund’s unfunded liability at $73 billion as of June 2012, up from $64.5 billion the year before.
“This is more costly the longer we wait,” said Ryan Miller of the Legislative Analyst’s Office during a hearing Wednesday.
The report said the state or school districts will likely be stuck with the bill, which could shift more taxpayer money from government services to pension costs.
Much of the problem stems from changes made in the late 1990s, when the stock market boom led state lawmakers to boost benefits and reduce payments into the pension fund.
Although Gov. Jerry Brown says the state’s annual budget deficits have been wiped out, steep costs involving pension funds and healthcare for retirees mean California will be facing financial problems for years to come.
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