The California teacher pension system faces a $19.6 billion funding gap during the next three decades, despite three years of strong investment returns, according to a new report. That means teachers, school districts and the state will need to boost contributions to the nation’s second-largest public pension system, the actuarial consulting firm Milliman reported.
The funding gap is narrowing for the California State Teachers’ Retirement System and the nearly 800,000 teachers it covers, the report said. The long-term deficit was projected at $24.2 billion as recently as 2004, but double-digit investment gains reduced the expected shortfall. With $168 billion in assets, CalSTRS can cover 87 percent of its pension obligations, up from 82 percent in 2003, the firm said. That is nearly at the current average of 88 percent coverage for 125 state retirement systems surveyed this year by Wilshire Consulting.