Teachers' pension fund falls further behind

Unfunded liabilities for the California State Teachers' Retirement System total $56 billion, up $15.5 billion from a year ago. At that level, Calstrs needs to score investment returns of more than 10 percent a year over the next 30 years, which is basically undoable. The fund estimates that its annual return will be 7.75, and even that is stretching things. From Bloomberg:

Ed Derman, the $150.1 billion fund's deputy executive director, said Calstrs will need additional contributions from members and school districts at some point. The power to increase contribution rates resides with the state Legislature, not the pension system managers, Derman said.

This only adds to the argument about significant pension reform, including the curtailment of defined benefit programs.

Under a formula that triggers automatic increases in state payments when the pension plan falls further behind its obligations, California will pay an estimated $140 million to $150 million more toward Calstrs this year. The state contributed $573 million in the fiscal year that ended June 30.