SACRAMENTO (AP) — California’s unfunded debt for teacher pensions has grown by nearly $11 billion after officials lowered its outlook for investment earnings.

The California State Teachers Retirement System reported Thursday that it is facing a $107 billion gap between the cost of pensions promised to teachers and the money currently set aside to pay for them.

As of June 30, 2017, the pension system was 62.6 percent funded, down from 63.7 percent a year earlier. It had $209 billion in assets.

ALSO READ: Giant California Teacher Pension System Targets Gun Sellers

CalSTRS officials say the increase in the unfunded obligation is due primarily to a decision last year to lower the assumed investment return by half a percent to 7 percent per year.

Assuming smaller earnings from investments means teachers, school districts and the state will have to make up the difference.

© Copyright 2018 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.

Comments (5)
  1. Ronald Stein says:

    Those unfunded pension liabilities are SUPPOSED to continually increase due to the cause of those unfunded liabilities, Defined Benefits. We’re constantly trying to put band aids over the wound, but the only way to heal the wound is to change Defined Benefits to Defined Contributions, like the rest of the world. With Defined Contributions ONLY, we there would be no need for CALPERS

    Since the public pension system is severely underfunded, city governments need to fund the retirements of former employees by taking money from government services as the increasing pension costs will likely continue to crowd out resources that otherwise would go to public assistance, recreation, libraries, health, public works, and in some cases public safety. Benefit costs are slowly crowding out the discretionary money available for states, districts, and schools to spend on other priorities.

    “Defined retirement benefits” are creeping into budgets, especially when those benefits are underfunded. The unintended consequences are that it’s unfortunate that future generations, unable to vote today, will bear the costs of many enacted pension programs, entitlements and boondoggle projects, requiring the younger generations to pay higher taxes and work later into their lives to pay for these promises.

    The international business world is intelligent enough to know that DEFINED BENEFITS, neither capped nor precisely quantifiable in advance financial disasters to any business, thus all businesses focus on the known, i.e., defined CONTRIBUTIONS alone.

    Stealing from the young who have no votes, but silently shoulder the costs and bear the burden of unfunded promises of these programs to enrich the old seems to describe the Governments expansion of entitlement benefits and other government services, along with the taxes young people will have to pay to support them, mostly to subsidize older Americans.

    Even before those young folks can vote, our Golden State schools are on track to force substantial budgetary cutbacks on core education spending, as public schools around California are bracing for a crisis driven by skyrocketing worker pension costs that are expected to force districts to divert billions of dollars away from education and other government services.

  2. Nelly Smith says:

    Good Day,

    Are you in need of an urgent LOAN?. here is a solution.
    We have provided over $1 Billion in business loans to over 15,000 business owners just like you.
    Do you want to pay off your debt, expansion of business or personal loan, you can contact us for your fast and reliable loan at a low interest rate of 2%, and affordable repayment plan with good credit conditions .

    CONTACT US NOW ON +15182866352

    Or email allisonpeterson59@gmail.com

    Sincerely,
    Allison Peterson

  3. Farhan Aziz Credit Loan says:

    Hello
    Am a private loan lender,fully registered and licensed,i give out the best loan to my client at a very convenient rate.The interest rate of this loan is 3%. I give out loan to public and private individuals.For more information contact us, for Personal loan, Business loan, Home Loans, etc,we got you covered.
    Please,only serious and genuine people should apply,no early repayment penalties,no matter your financial score,just a Valid ID,house address and you will be approved a loan. If you are a serious and ambitious person and wishes to apply for a loan contact us today at Email: farhancredit247@gmail.com
    call or add us on what’s app +1 (307)216-4782

Leave a Reply

Please log in using one of these methods to post your comment:

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s