CalSTRS Reports First Negative Investment Returns Since Great Recession

The California State Teachers’ Retirement System (CalSTRS) saw a -1.3% return on its investment portfolio for the 2021–22 fiscal year. This is the first negative return since 2009 when global markets were reeling from the Great Recession. In a press release, CalSTRS said the situation “reflects the ongoing volatility of global financial markets impacted by inflation, rising interest rates, the COVID-19 pandemic and the war in Ukraine.”

The portfolio losses will not affect teacher benefits, which are guaranteed by the state. But if the losses continue, school districts could see their obligations rise even above the $1.3 billion statewide increase slated for 2022-23.

“The amounts at stake here are enormous, and they overshadow all the other new investments the state is considering. Worse, the pension costs will hit school budgets even harder if student enrollments continue to decline,” Chad Aldeman, Policy Director at Georgetown University’s Edunomics Lab and the creator of TeacherPensions.org, told EdSource

In a statement, CalSTRS Chief Executive Officer Cassandra Lichnock emphasized the fund’s long-term outlook and solvency.  

“We are proud to deliver pensions to California’s public-school teachers as we have for more than a century,” said Lichnock. “The value of a CalSTRS pension is that the benefit is guaranteed, even during difficult economic times. Our members can rely on us to provide a secure retirement now and in the future. And thanks to our long-term approach, we remain on track to achieve full funding.”

CalSTRS is 73.0% funded as of June 30, 2021. Thanks in part to a record 27.2% return for FY 2020-21, the agency says it will remain fully funded by 2046.


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