California Governor Signs Plan to Fully Fund Teacher-Pension System By 2046
By guest blogger Madeline Will
Gov. Jerry Brown signed off Tuesday on a plan to fully fund California's teacher-pension system by putting more of the share of teacher-pension costs onto districts' shoulders.
His signature on the bill, AB1469, brings to fruition a major component of his fiscal 2015 budget plan, which aimed to entirely fund the teacher-pension system by 2046 through increased payments by the state, districts, and teachers. California currently has approximately $74 billion in teacher-pension liabilities, and the California State Teachers' Retirement System is only about 67 percent funded. Estimates suggested it would have run out of money in 33 years without alterations.
Now, districts' share of teacher-pension costs will increase to more than 19 percent of teacher payroll, up from about 8.25 percent. Stephen Sawchuk's comprehensive story in the latest issue of Education Week took a close look at the impact this could have on districts.There are concerns, he found, that the changes will effectively take teacher-pay increases off the table.
This year, contributions from teachers, schools and the state will total $276 millionwhich will eventually grow to more than $5 billion annually.
"This bill will ensure a decent retirement for hundreds of thousands of teachers, both now and for decades to come," Brown said in a statement.