Speaker Pérez, Assemblymember Bonta Announce Assembly Hearings on CalSTRS Funding

Wednesday, January 29, 2014

(SACRAMENTO, CA) – Speaker John A. Pérez (D-Los Angeles) and Assemblymember Rob Bonta (D-Oakland), Chair of the Assembly Public Employees, Retirement and Social Security Committee, on Wednesday announced they would push to implement a long-term solution to the funding shortfall in the California State Teachers' Retirement System this year.

"The Assembly will pursue a solution to the STRS shortfall this legislative session," said Speaker Pérez. "Further delay only means further cost and further exposure for the state's general fund. We believe there must be shared responsibility for a funding solution between school districts, the state and teachers. Our end goal is a State Teachers Retirement system that is 100% fully funded."

Assemblymember Bonta noted his committee would begin holding hearings in February.

"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," Assemblymember Bonta said.

State Treasurer Bill Lockyer welcomed action by the Assembly to resolve the funding shortfall.

"I welcome a serious effort to address financial problems that threaten STRS' long-term survival," said Lockyer. "It's a tough assignment. Prompt action is imperative, because the problem grows costlier as time passes. Hopefully, the Legislature and Governor can produce a solution this year that strengthens STRS' financial structure and protects our teachers' retirement security."

State Controller John Chiang announced his backing of the Assembly plan.

"Speaker Pérez and Assemblyman Bonta are spot-on in calling for immediate action and shared sacrifice in addressing CalSTRS' unfunded liability gap during the coming year," said Chiang, a member of the governing board of CalSTRS. "If lawmakers can meet the challenge with courage and fiscal prudence today, Californians can avoid a crisis tomorrow that imperils not only teachers, but taxpayers and the education system in which they have entrusted our children's future."

California State Teachers' Retirement System Chief Executive Officer Jack Ehnes announced his support of the Assembly Democrat plan.

"CalSTRS welcomes Assembly Speaker John A. Pérez and Assemblymember Rob Bonta's swift action to the Governor's invitation to develop a long-term funding solution," said Ehnes. "With costs rising by $22 million a day, having a plan in place as early as this year could result in billion-dollar savings to the state.

The Legislature's desire to enact a full funding plan for the Defined Benefit Program demonstrates leadership and upholds the state's promise to California's educators. For some time CalSTRS has stated that the solution is a gradual, predictable increase in contribution rates, fair to all parties involved. As stated in our report, Sustaining Retirement Security for Future Generations: Funding the California State Teachers' Retirement System, submitted to the Legislature last year, the definitive approach to bridge the CalSTRS $71 billion funding gap is one that occurs within 30 years. CalSTRS remains committed to assist the Legislature and the Governor as they work to address this important issue."

Below are links to the audio from today's news conference:

Opening remarks from Speaker Pérez at today's CalSTRS news conference. (2:06)

Opening remarks from Speaker Pérez at today's CalSTRS news conference. (2:06)

Speaker Pérez says now is the time for ALL parties to reach a consensus. (:15)

Speaker Pérez says the worst thing to do about the CalSTRS shortfall is nothing. (:35)

Opening remarks from Assemblymember Rob Bonta at today's CalSTRS news conference. (3:11)