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CalSTRS reported ready to seek more state funding

Published: Tuesday, Oct. 11, 2011 - 12:00 am | Page 6B
Last Modified: Tuesday, Oct. 11, 2011 - 11:06 am

For more than two years, CalSTRS has been talking about asking state lawmakers for more money to plug its funding gap.

Now the teachers' pension fund believes the Legislature is ready to listen.

Pension fund Chief Executive Jack Ehnes said last week he wants Gov. Jerry Brown to include additional CalSTRS funding in a long-awaited pension reform proposal he's expected to release in the coming weeks.

"We think we're at the right moment where it's time to move on the funding strategy politically," Ehnes said at a CalSTRS board meeting in Huntington Beach, according to Bloomberg news.

Ehnes' comments represent a subtle shift in the California State Teachers' Retirement System's efforts to tackle an estimated $56 billion long-term funding shortfall.

In a time of tight budgets and waning sympathy for public employees, CalSTRS has resisted proposing actual legislation to raise contribution rates from employers. Instead, it's spent the past two and a half years lobbying lawmakers, the Governor's Office and school districts.

CalSTRS thinks its education campaign is paying off – and lawmakers might be amenable to increasing contributions for teachers' pensions.

"This may be the time that this issue gets resolved," said Deputy CEO Ed Derman in an interview Monday. Lawmakers "recognize the problem," he added.

Derman noted that Brown urged the Legislature last spring to deal with CalSTRS' funding issues, although he didn't lay out a specific plan. It's unclear whether Brown will include a funding plan for CalSTRS in his pending pension reform proposal. A spokesman for the governor declined to comment.

CalSTRS gets around $6 billion a year combined from the state, school districts and teachers. Unlike CalPERS, the teachers' pension fund can't raise employer contribution rates without legislative approval.

Many of CalSTRS' financial troubles stem from the financial crash of 2008. In August, State Auditor Elaine Howle added CalSTRS to her list of "high-risk" issues confronting the state.

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Call The Bee's Dale Kasler, (916) 321-1066.

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