CTA, its retired teacher affiliate, and public employee organizations are working hard in the state Capitol to protect the sanctity of the State Teachers' Retirement System (CalSTRS) and the Public Employees Retirement System (CalPERS).
These efforts come at a time public officials are discussing how best to reduce the systems' "unfunded liability," the difference between the value of investments of CalSTRS and CalPERS and the long-term costs of providing pensions to future retirees.
At a recent CalSTRS board meeting, it was announced that the system's one-year-earnings on investment of 12.3% had narrowed the gap, with the teachers' retirement system able to fund 86% of its long-term obligations, up from 83% in 2004.
Teacher advocates have been underscoring that to continue closing the margin, the system must avoid reducing the benefits of future retirees. For more than 20 years, CTA has effectively opposed legislative proposals that would set up a two-tiered systems through which newer teachers would receive lower benefits upon their retirement than current retirees or senior educators nearing retirement age.
The advocates point out that a sound and stable retirement is one important element attracting and keeping teachers in the profession.
In recent years, the unfunded liabilities of the two retirement systems have risen and fallen with the undulations of the stock market. The margin grew slightly larger about four years ago when the stock market - a major source of investments for retirement systems in California and around the United States - underwent a pullback.
With the market nearing record levels and real-estate investments also performing well, both CalPERS and CalSTRS are reaping double-digit returns.
Last year, the opposition of teachers and other public employees resulted in Gov. Arnold Schwarzenegger abandoning an effort to put on the November ballot a measure that would have forced a number of public employees - including all those hired in future years - into a reduced retirement plan. The proposal would have put these new employees - and others who transferred out of their current districts - into a "defined contribution plan," instead of the current defined benefit plan that provides a guaranteed, set pension amount. Under a defined contribution plan, employees are only guaranteed that their employer will put aside a certain "defined" amount of investment money on their behalf. If those funds are not invested well, the retirees could wind up with a retirement amount too small to support them.
While another legislative version of this proposal has been introduced this year, CTA's opposition to it, bolstered by opposition of other public employee groups, has prevented the bill from moving anywhere in the legislature.