FOR IMMEDIATE RELEASE: April 4, 2014
CONTACT: Everett Rice @ 916-651-4037
CTA Lobbies Against CalSTRS Fix Despite Growing Debt
SACRAMENTO – Even while California’s retirement fund plunges deeper into debt, the California Teachers Association (CTA), the largest teachers’ union in California, is opposing a bill by Senator Mimi Walters that would start the process of fixing the problem.
The California State Teachers Retirement System (CalSTRS) announced Thursday that the unfunded liability for its obligations to pay retirement for its members grew by almost three billion dollars in just the past year, from $71 billion to $73.7 billion. This unfunded liability grew despite CalSTRS investment portfolio showing a 13.9% return over the same period.
With unanticipated state budget revenue of $6 billion, Senator Walters introduced Senate Bill 984. Her bill could appropriate up to $2 billion from the increased revenues to reduce CalSTRS’ shortfall. The savings to taxpayers are undeniable: $1 billion added to the fund now saves almost $9 billion over 30 years, and $2 billion now saves taxpayers $17.5 billion. This will help alleviate the burden on future generations who will be paying for the failure to address this problem.
However, on the day before CalSTRS released its troubling report, the CTA formally announced its opposition to Walters’ reasonable and thoughtful solution.
“The math is simple,” said Senator Walters. “Everyone agrees that the longer we wait to take action, the more we’ll have to pay in years to come. I fail to understand why the largest teachers’ union in the state would oppose an effort to ensure its own members have a secure retirement, and why the CTA would oppose a working group to find long-term viable funding solutions as proposed by Governor Brown, Assembly Speaker Perez, and myself.”
“Our teachers work hard under challenging conditions,” added Walters. “And as our current teacher workforce retires, who is going to step up to replace them unless they know they will be able to afford to retire when their turn comes? The numbers don’t lie. This problem is not going to fix itself.”
In the 16 days since Senator Walters introduced SB 984 on March 19th, CalSTRS’ unfunded liability has grown by $240 million ($15m per day). Meanwhile, there has been no fiscally sound action taken to address the growing liability to our teachers’ retirement system. The CTA should examine its motives for not working in the best interest of California teachers or of California families.
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