A long-sought CalSTRS rate increase, more than doubling the bite from school districts, is the reason given last week for a proposal to increase the lump-sum death benefit, unchanged in the last 13 years.
The CalSTRS board, unlike most California public pensions, lacks the power to raise employer rates, needing legislation instead. But the board is authorized to make annual increases in the lump-sum death benefit to keep pace with inflation.
Because the system is underfunded, the CalSTRS board has made no inflation adjustment in the death benefit since 2002. The board was told that it could have increased the death benefit by about 34.7 percent during the period.
One level of coverage with a payment of $6,163 would have increased to $8,299, the payment for another from $24,652 to $33,196. The long-term CalSTRS actuarial obligation would have increased by $238 million.
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