Did you think that CalSTRS would be able to pay pensions to retired teachers forever?
Today, is has $73 billion in unfunded liabilities. On January 1, 2014, thanks to GASB, CaSTRS is going to be forced to be honest about the unfunded liabilities and they will triple to over $220 billion. This is an unsustainable system.
“The unfunded liability at the California State Teachers’ Retirement System is $73 billion currently and growing at the astonishing rate of $17 million per day. If corrective action is not taken – that is, if the state, school districts or teachers don’t contribute more into the fund – CalSTRS could deplete all its assets by 2044.
The spreading red ink at the teachers’ retirement system “may be the state’s most difficult fiscal challenge,” the Legislative Analyst’s Office warned in a recent report.”
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By the Sacramento Bee Editorial Board, 3/25/13
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“The fund needs $4.5 billion in additional contributions per year for the next 30 years to dig out of the hole it is in. That is a huge increase.
Combined with the $1.4 billion the state contributes to CalSTRS annually now, the total would exceed the entire state contribution to University of California and the California State University system combined, the LAO says.
It’s unlikely the Legislature will approve contribution increases of that magnitude, but it must do something big and dramatic to stave off the consequences of allowing this obligation to balloon out of control.”