California’s K-12 Pension Cost Crisis

Before 2005 my knowledge of defined benefit (DB) pension plans was limited to experience with a small business I joined in 1979 that offered a DB plan. I was pleased with the opportunity for tax-deferred compounding but also skeptical about the ability of a small business to pay future benefits. So I worried about adequate pre-funding and later became a plan trustee until I retired in 2003. When I joined the board of the California State Teachers’ Retirement System (CalSTRS) in 2005, I assumed adequate pre-funding was its goal. But then I learned four things…