Last month we warned you that CalSTRS (California teachers’ pension fund) was in a bad spot and they were hoping that nobody would notice.
Yesterday CalSTRS announced that investment losses have left the fund with a $42.6 billion dollar shortfall.
Even more worrisome: the fund will be completely wiped out shortly after today’s young teachers enter retirement. To counteract that problem, the fund will need to start sucking in major contribution increases almost immediately.
Naturally the pension system wants to resolve the situation by sending more Sacramento lobbyists to persuade legislators to “take action”. And by “take action” they mean increase contributions to the fund. Since a majority of teachers’ pension contributions come from taxpayers… Well you know what that means.
With the CalSTRS retirement system circling the drain and preparing to ask taxpayers for a bailout, it’s probably a good time to remind you who will be reaping the generous rewards from these unsustainable commitments made by gullible school boards under union pressure. The OC Register recently released the CalSTRS database obtained through a public records request.
We couldn’t help but notice that FFFF favorite Cameron McCune topped the list with a pension amount that is more than double the rest. McCune was the administrator who strapped Fullerton with the unconstitutional school laptop program that forced parents buy $1,500 Apple laptops for their children and is still subjecting kids to unsafe Internet access.
It is unlikely that any of these retirees were strictly teachers. Most if not all of them were superintendents, principals and other administrators who were able to eke their way out of the classroom and on to even bigger bucks.
Certain Fullerton school board members have taken issue with our characterization of the CalSTRS teachers’ pension system as being underfunded and unsustainable. Our resident pension expert suggests that that the board may be reading a few too many rose-colored newsletters emanating from the retirement system itself. Perhaps some illumination is necessary.
Before the market crash, CalSTRS was facing a $22.5 billion dollar shortfall. Since then, the market crash has killed about 30% of its assets. At this point, nobody knows how short the fund will be until it is recalculated in the spring. But the results are guaranteed to be frightening.
It’s true that CalPERS is getting all of the attention lately, but that’s only because CalSTRS doesn’t have the same power to levy rate hikes without legislative approval. Rest assured, the teachers’ union has already begun its lobbying effort to boost taxpayer contributions for teachers who retired long ago.
Some estimate that the fund will need to increase contributions by 75% next year. Pension apologists love to claim that “teachers pay for their own retirement”. The truth: payments to the teachers’ pension fund are primarily made by taxpayers, with only about 40% coming from teachers.
Further efforts by CalSTRS to distance itself from the problems at CalPERS were hindered again this week as Moodys cut debt ratings for both agencies.
After the bomb goes off next year, the smoke will clear and taxpayers will be reaching into their wallets to clean up another mess. Who is to blame? State legislatures past and present, ignorant school boards across the state, the all-powerful teachers unions and their deceptive actuarials.
For regular updates on the pension crisis and its affect around the nation, visit Fullerton’s very own PensionTsunami.com. School board members should subscribe to email updates, lest they remain uninformed as the tidal wave approaches.