Business & Real Estate

CalSTRS reports 1.4 percent investment returns

CalSTRS reported a 1.4 percent investment return for the latest fiscal year Tuesday, far below its official target.

The results reported by the California teachers’ pension fund came one day after the state’s largest fund, CalPERS, reported similarly meager returns of just 0.61 percent.

Like CalPERS, the $188.7 billion teachers’ fund was weighed down by a difficult year in the stock market. CalSTRS’ public stock portfolio shrank by 2.3 percent. Those losses were offset by an 11.1 percent gain on its real estate portfolio and a 5.7 percent gain on bonds.

CalSTRS officials said they remain on track to restore the pension to fully funded status, thanks to higher contribution rates ordered by the Legislature two years ago. The pension system was just 69 percent funded as of last summer, the latest figures available, but expects to be fully funded in 32 years.

“Single-year performance and short-term shocks, such as Brexit, may catch headlines, but the CalSTRS portfolio is designed for the long haul,” said Chief Investment Officer Christopher Ailman in a prepared statement.

While the latest results fell short of CalSTRS’ target of 7.5 percent, Ailman said the California State Teachers’ Retirement System has earned average returns of 7.7 percent the past five years. The 20-year average return, however, has fallen to 7 percent.

Dale Kasler: 916-321-1066, @dakasler