If no changes are made, the California State Teachers' Retirement System, known as CalSTRS, will be broke in 30 years and will increasingly rely on taxpayers to bail it out. Almost $1.3 billion of the state's general fund this year goes toward the teacher pension fund.
"$11,000 per teacher, per year for the next 15 years is what we need in order to keep the plan from going broke," said Marcia Fritz from the California Foundation for Fiscal Responsibility.
The median benefit for new retirees is $49,000 a year, or 60 percent of pay. Right now, the state is kicking in $1 for every $2 that teachers and their school districts each pay into the retirement fund. The shortage has worsened because teacher layoffs have meant fewer people paying into the system while benefits were expanded, leading to $40 billion in unfunded liabilities by 2042. Pension fund managers say there's still time to act.
"There is no immediate crisis right now," said CalSTRS spokesman Patrick Hill. "For now, we're in good shape. We can pay these benefits for 30 years, but the longer we wait to craft a solution, the more expensive it will be."
Lawmakers have been slow to act since the teachers union is one of the major contributors to Democrats, who control Sacramento's agenda.
Some of the solutions include reducing retirement benefits for not just new employees, but for current teachers and maybe even switching to a 401(K)-style plan.
Teacher Maggie Ellis, an 18-year-veteran from Elk Grove, can't believe part of the discussion is to ask workers to contribute more even after a couple of rounds of pay cuts.
"I don't know that anyone is going to want to go back into teaching. At this point, I'm barely making my bills as it is," said Ellis.
Assb. Allan Mansoor, R-Costa Mesa, introduced a bill that would take away California workers' rights to collective bargaining for pensions, so they'll have their own battle to fight.
