Assemblymember Rob Bonta: Assembly Democrats to Work Toward Solution for CalSTRS Funding Liability this Year
(SACRAMENTO, CA) – In this week's Democratic Radio Address, Assemblymember Rob Bonta (D-Oakland) discusses the unfunded liability facing the California State Teachers' Retirement System and announces that the Assembly Committee on Public Employees, Retirement and Social Security will be hosting a series of public hearings to create a funding plan.
This week's radio address is at 3:08.
"This is the Democratic weekly address from the Assembly Democratic Caucus."
Assemblymember Rob Bonta:
"Hi. This is Assemblymember Rob Bonta.
The California Teachers Retirement System, or CalSTRS, is facing a significant unfunded liability with respect to its Defined Benefit Program.
Based on the most recent numbers, CalSTRS has a shortfall in funding of approximately $71 billion and will run out of funding for the program by 2046 if no changes occur.
It is important to keep in mind as we move forward in this discussion that the CalSTRS retirement benefit is the primary, and often the only, source of ongoing guaranteed retirement income paid to a teacher in California because California's public educators do not earn Social Security benefits for their public education service. This fact alone makes it all the more important for us to ensure the long-term stability of CalSTRS.
Because the contribution rates for CalSTRS are set by the Legislature and not the Retirement Board, it is the responsibility of the Legislature and the Governor to determine the best way to address the funding shortfall.
As Chair of the Assembly Committee on Public Employees, Retirement and Social Security, I am committed to beginning a process that will result in an ongoing permanent funding solution for CalSTRS that can be enacted this year.
We will begin this process by having the first of a series of hearings on February 19th. This hearing will build on the joint hearing we held last year with the Senate by updating the information we received last year and getting the current perspectives on the issue from the various stakeholder groups.
Additional hearings will follow that will focus on the significant issues that must be resolved before a solution can be reached such as the impact employer increases will have on Proposition 98 funding and how the vested rights of members impact the ability to increase current member contributions.
The goal of this process will be to enact a funding plan that achieves full funding of the plan over the next several decades thus enabling CalSTRS to pay the benefits owed to members while taking into consideration the impact higher contributions will have on state, school, and teacher's budgets.
Last year I introduced AB 611 with the hope that it could become the vehicle for an ongoing funding solution. That bill is currently in the Senate retirement committee and I am hopeful that when a solution is developed this year, it will be amended into that bill.
I am eager to begin this process and confident that an equitable and permanent solution can and will be found to the CalSTRS funding problem.
Ensuring the long term financial security of California's hardworking and dedicated teachers is a goal we are hopeful we can achieve this year.
This is Assemblymember Rob Bonta.
Thank you for listening."
CONTACT: Amy Alley (916) 319-2387