Blog: Plan Perspective

Plan Perspective: Jack’s Blog

Overview

A perspective on the current and future state of the CalSTRS Defined Benefit Program from CalSTRS CEO, Jack Ehnes.

Blog entry Jack Ehnes

Inclusive Engagement a Key Theme of Third Annual Sustainability Report

Within CalSTRS’ third annual Global Reporting Initiative 2015–16 Sustainability Report: Global Stewardship at Work, the theme of internal and external engagement permeates our business landscape, investment strategies and long-term drive to achieve our member-focused mission.

Striving to engage and actively seek stakeholder input is an integral and important focus of CalSTRS’ sustainability reporting efforts. This year, as in the past, we launched a stakeholder materiality survey. The results of that survey provided guidance for the topics covered in this report, including an outline of comments received from more than 400 stakeholder responses.

Blog entry Jack Ehnes

CalSTRS Defined Benefit Program Continues Progress Toward Long-Term Funding Goal
Changes to actuarial assumptions likely to increase State of California and CalSTRS “2% at 62” member contribution rates beginning July 1, 2017

As trusted fiduciaries of California educators’ pensions, on an annual basis, the Teachers’ Retirement Board assesses CalSTRS’ long-term funding status in a detailed actuarial valuation report. In order to support the accuracy of these financial projections, the board periodically reviews actuarial assumptions to ensure the data reflects the system’s recent actuarial experience.

Blog entry Jack Ehnes

How CalSTRS Honors Earth Day

Started as a grassroots effort in 1970, Earth Day grew out of concern for the environment and continues to enjoy mainstream support today. People and organizations throughout the world hold activities to mark this annual celebration every April 22, and CalSTRS too, honors this occasion. The idea behind Earth Day serves to inspire responsibility towards protecting our environment.

Blog entry Jack Ehnes

Teacher Pensions Help Save Lives

When you think of groundbreaking breast cancer research you might expect to find a group of skilled medical experts and a wealth of scientific analysis. What you might not expect to find is the invaluable role the nation’s largest educator-only defined benefit pension plan played in a gold-standard study such as this.

Blog entry Jack Ehnes

It’s All About Diversification: Asset Allocation Unveiled

Every four years, the Teachers’ Retirement Board’s Investment Committee undertakes an asset allocation study. In November, the conclusion of CalSTRS’ 2015 Asset Allocation Study is set to take place pending a final decision from the Teachers’ Retirement Board. The board holds exclusive control over the investment and administration of the Teachers’ Retirement Fund.

Blog entry Jack Ehnes

New Pension Initiative Efforts Are Not a Solution

By creating the illusion of a catastrophic pension crisis, pension critics would have you believe that the only way to create a sound and sustainable retirement savings program is to move away from a defined benefit pension, preferably replaced with a defined contribution plan or perhaps none at all. Many recent studies, media articles and now a new ballot initiative are based on the same flawed logic.  

Blog entry Jack Ehnes

Should Investors De-Carbonize Their Portfolios?

No doubt the introduction of proposed legislation included in Senate Bill 185, the Public Divestiture of Thermal Coal Companies Act, turns up the heat in the discussion on how investors might approach de-carbonization of their portfolios in response to climate change issues. If passed, this bill would require the CalSTRS and CalPERS boards to engage with thermal coal companies and, if consistent with their fiduciary duties, to divest from those thermal coal companies that are not transitioning to clean energy generation.

Blog entry Jack Ehnes

Is Conflicted Advice Costing You? – A New Study Says Yes

Conflicts of interest in the investment advice to workers who roll over their retirement savings from employer-sponsored defined contribution plans into Individual Retirement Accounts add new concern for middle class families coping with dwindling retirement savings. New findings from a report released by the President’s Council of Economic Advisers indicate that conflicted advice adds large and economically meaningful costs to Americans who are saving for retirement.

Blog entry Jack Ehnes

Environmental Activist, U.S. Vice President and Generation Chairman Al Gore Speaks to the CalSTRS Board – 2/9/2015

The CalSTRS board meeting on Friday, February 6, 2015, featured a prominent environmental activist who sounded the alarm on climate change and how to counteract it, Chairman of Generation Investment Management, and U.S. Vice President from 1992 – 2000, Al Gore, and Senior Partner of Generation Investment Management, David Blood.

Blog entry Jack Ehnes

Year-End Wrap Up and a Look at What 2015 Holds

As we end this year and look forward to the next, we are able to do so with a renewed confidence. In June, consensus recognition of the need to stabilize CalSTRS’ funding emerged with the enactment of the funding solution detailed in Assembly Bill 1469. The shared-responsibility plan gradually increases contributions from all plan contributors by an amount that is projected to fully fund the Defined Benefit Program in roughly 32 years.

Blog entry Jack Ehnes

Answering the Call to Global Action on Climate Change

Global leaders gathered at the United Nations Climate Summit 2014 in New York this September in a show of solidarity for climate change policy. CalSTRS was among the more than 800 organizations to contribute to what many hope is the beginning of a comprehensive global agreement on climate change anticipated to take place in Paris in December of 2015.

Blog entry Jack Ehnes

The Road to a Full Funding Plan

The importance of a plan that fully funds the Defined Benefit Program cannot be overstated. It took years of overcoming budgetary constraints, educating numerous policymakers and stakeholders, and an overall perseverance to see a funding plan come to fruition.

Recently, CalSTRS sat down with a few individuals who were a part of this tremendous effort and they shared some of the challenges and highlights. This video captures the key moments that led to a funding plan.

For more information about contribution rate increases and other provisions of Assembly Bill 1469, visit the CalSTRS 2014 Funding Plan.

Blog entry Jack Ehnes

A Message for California’s Educators

When we talk about CalSTRS we’re talking about a financial institution that dates back to 1913. Through the years, the fund has endured many difficult times and changes. This last decade has been particularly turbulent for CalSTRS, but we have never lost sight of our mission to provide a secure retirement to California’s educators.

Blog entry Jack Ehnes

Recent Developments Suggest a Funding Plan is Within Reach

Several developments suggest a funding plan for CalSTRS is a top priority for the Governor and Legislature this year. In addition to Governor Brown’s call for development of a funding plan in his budget proposal, the Legislature has begun the process of crafting a permanent funding solution for the Defined Benefit Program. As this process takes shape many significant issues will be examined. The importance of staying focused on funding issues relevant to CalSTRS is paramount.

Blog entry Jack Ehnes

Setting a Standard for the Next 100 Years

2013 was an especially significant year to CalSTRS as we celebrated 100 years of service to California’s educators. Last year kicked off with a newly designed website and a video that highlighted accomplishments of the past century.

Blog entry Jack Ehnes

The Principal Cause of the CalSTRS Funding Shortfall

As CalSTRS begins to emerge from the worst economic downturn since the Great Depression, renewed focus on the sustainability of the defined benefit pension has surfaced, with some calling for the elimination of a plan that has provided a secure retirement to California’s educators for the last 100 years.