12/02/2021

Could CalSTRS reserve pay down pension debt?

As CalSTRS rates are more than doubling, squeezing school budgets, an inflation-protection account that keeps teacher pensions from dropping below 85 percent of their original purchasing power has a large and growing excess of funding, $5.6 billion last year.

Gov. Brown put a new focus on quickly paying down pension debt this year with a $6 billion extra payment to CalPERS for state workers, estimated to save $11 billion over two decades if all goes as planned.

The governor’s finance department, which is working on a new state budget to be proposed in January, declined to comment last week on whether using the inflation-protection reserve to pay down CalSTRS debt is being considered.

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