CalSTRS is even further ahead of schedule than last year in its goal to reach full funding by 2046.

This good news is one of the key findings from the ninth annual Review of Funding Levels and Risks report presented to the Teachers’ Retirement Board at the November meeting.

Full funding means the Teachers’ Retirement Fund has enough money to cover the obligations associated with all future payments for CalSTRS members and beneficiaries. Current projections show CalSTRS could reach full funding as soon as 2043.

The report outlines the major risks that can affect full funding, helps assess the soundness and sustainability of the CalSTRS Defined Benefit Program, and tracks CalSTRS’ progress toward achieving this goal. This year’s breakdown is based on the June 30, 2023, Actuarial Valuation of the Defined Benefit Program and reflects relevant changes that have occurred since the valuation, including investment performance in the last fiscal year and the recent growth in the number of public educators who are members of the Defined Benefit Program.

The plan assumes an annual investment return of 7% and an annual payroll growth of 3.25%. Both were exceeded in the 2023–24 fiscal year. The CalSTRS Investment Portfolio earned an 8.4% return net of fees in the 2023–24 fiscal year while the payroll increased by more than 8%.

Ongoing risks such as geopolitical turmoil, inflation and projected enrollment declines in K–12 public schools remain and will be monitored.

Overall, the report demonstrates that CalSTRS is still financially stronger today than after the global economic crisis of 2008 and better positioned to handle future risks because of the funding plan.