CalSTRS funding gap looms
The second-largest public pension fund in the nation dropped in value by 25 percent in 2009.
That has fanned the flames for reformers who say the California State Teachers' Retirement System is unsustainable.
CalSTRS, which funds pensions for teachers and classified employees throughout the state, saw a decline of $68 billion in its investment portfolio when the economy took a nose dive at the end of 2008.
It has since regained $23 billion, but still faces $22.5 billion in unfunded liabilities, according to a recent report from the Pew Center.
Furthermore, the report said, that shortfall will grow if the state does not make changes.
CalSTRS administers retirement, disability and survivor benefits for California's public school educators and their families in the state's 1,400 school districts, county offices of education and community college districts.
"Our members' benefits are secure, yet the current economic picture clearly illustrates investments alone cannot meet pension obligations in the long term," said CalSTRS Chief Executive Officer Jack Ehnes in a statement.
"We are not in a crisis to resolve the contribution gap, but the sooner a solution is found, the lower the cost."
CalSTRS members currently pay 8 percent of their payroll into the fund.
School and community college districts pay 8.25 percent of payroll into the fund, while the state contributes 2.017 percent of payroll into the fund.
But school districts are also mandated to pay 9.7 percent of payroll into the California Public Employees' Retirement System for classified employees. Those employees contribute 7 percent of their pay into CalPERS.