More than 100,000 retired California teachers receive pension boosts due to inflation
.JPG "The California State Teachers Retirement System, or CalSTRS, headquarters on Waterfront Place in West Sacramento is seen at right in a drone photo Dec. 5, 2020.")
Soaring inflation this year triggered special pension boosts for about 112,000 retired California teachers, the California State Teachers’ Retirement System announced Thursday.
The teachers’ retirement system provides a unique benefit that preserves retirees’ “purchasing power.” When inflation reduces the value of their pension dollars by more than 15%, the system makes a permanent adjustment, pushing retirees’ purchasing power back up to 85%.
The inflation rate CalSTRS used for the fiscal year that ended in June was 8.3%, according to the retirement system’s announcement.
That pushed the purchasing power of about 50,000 retirees below 85% for the first time, triggering new adjustments for them, according to the announcement. Only teachers who retired in 2005 or earlier were eligible for the adjustments, which showed up on this month’s pension checks.
CalSTRS’ announcement said the system has “one of the strongest anti-inflation programs operated by any public pension system in the nation.”
At CalPERS, most retirees are receiving cost-of-living increases of either 1.2% or 2% this year, with a small group receiving up to 4.7%.
Every CalSTRS retiree receives a 2% increase every year, calculated based on their original benefit amount (it’s not compounded).
And next year, teachers who retired before 1999 will receive yet another adjustment as the result of Senate Bill 868, which Gov. Gavin Newsom signed Sept. 30.
The law provides a 15% increase for teachers who retired before Jan. 1, 1980; 10% for those who retired between January 1,1980 and December 31, 1989; and 5% for those who retired between January 1, 1990 and December 31, 1998.
The law is meant to improve benefits for teachers who missed out on enhanced benefits that kicked in in 1999, according to CalSTRS’ announcement. The increases from the bill will take effect in July of next year, according to the announcement.
This story was originally published October 7, 2022 at 7:00 AM.