SACRAMENTO (CBS/AP) – The board overseeing California’s teacher pension system has lowered the fund’s investment forecast for the second time in 14 months.
The California State Teachers’ Retirement System board of directors voted 9-1 Thursday to lower its assumed annual investment return from 7.75 percent to 7.5 percent. The move will increase the system’s projected unfunded liability by $5.9 billion.
It also is important because as the fund makes less money through investments, it needs more from rank-and-file teachers, school districts or the state’s general fund.
Board members said they would err on the side of caution amid stock market volatility.
The board last lowered the assumed rate of return in December 2010, when it was reduced from 8 percent. That was the first time in 15 years it had taken such action.
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