The California State Teachers Retirement System said today that the gap between its promises to pensioners and its assets to pay them grew to $64.5 billion in fiscal 2011, up $8.5 billion from a year earlier.
The unfunded ratio grew from 29 percent to 31 percent despite the fund's investments turning a 22 percent profit for the year that ended on June 30, 2011.
CalSTRS Deputy CEO Ed Derman said during a conference call this morning that the fund would need to realize 10 percent returns for the next 30 years to climb out of the funding hole through investments alone.
Put another way, CalSTRS needs an annual infusion of money equal to about 13 percent of the annual wages earned by its 430,000 school-employee members. Actuaries said in a report due to the CalSTRS board on Thursday that losses carried over from the stock market collapse, a lowering of investment return assumptions and money allocated to a special benefits fund all contributed to the growth of the unfunded liability.
CalSTRS in February reported assets of $152 billion, sustaining its pension fund for 856,000 public school teachers and their families in California's 1,600 school districts, county offices of education and community college districts.
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