Monday, October 27, 2014

CalSTRS Report Could Spark Same Issue for UC Pension

The CalSTRS board was told this month that financial experts are forecasting investment earnings of 7 percent a year or less during the next decade, below the 7.5 percent assumed by the pension fund.  If the new forecast turns out to be correct, long-sought legislation in June that phases in a $5 billion CalSTRS rate increase over the next seven years could fall short of the goal of projecting full funding in three decades.

It’s even possible that with new power granted by the legislation the California State Teachers Retirement System board could, in three to seven years, add another rate increase for the state and school districts to get full funding back on track. The new forecast from eight consultants and five asset managers also casts a shadow on the 7.5 percent earnings assumptions of the California Public Employees Retirement System and the UC Retirement Plan...

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