20 years ago, the California State Senate caved to pressure from public sector unions to remove me from the board of the California State Teachers Retirement System (CalSTRS).
Yup, the current investment return assumption is irrelevant to this discussion. In 2006 STRS was assuming 8% on a ~60/~40 stocks/fixed income portfolio. I said they should use 6.2% and fully fund contributions at that rate (they were also not funding the ARC). Because, unlike FASB, GASB allows public pension funds to discount liabilities at the investment return assumption, that also means STRS's liabilities accreted at the investment return assumption, which is a double whammy for the unfunded liability. In any event, it's too late for SFUSD, the damage was done long ago. The only thing your daughter might promote is elimination of OPEB.
Those are only back to 2021. I've been making proposals since 2005, starting with the investment return assumption, then ERISA-allowed reforms to lower benefits for years not yet worked, then accounting changes, GASB governance changes and more, plus OPEB reforms and support for political candidates maybe willing to take on the issues. No success. Others need to engage!
What investment return were you requesting? Here are the actuals:
As of the most recent reporting in July 2025, the California State Teachers' Retirement System (CalSTRS) achieved a 7.4% annualized return over the 20-year period.
This long-term return consistently outperforms the system's actuarial investment assumption of 7.0%, reflecting sustained, long-term growth for pension beneficiaries.
If the investment returns used in the actuarial studies are inordinately low, that will cause the contributions to increase and result in fewer dollars for teacher salaries and operations. My daughter is a teacher in LAUSD and starting salary was $54k which is extremely low income by CA AMI standards. The problem is not the investment rate of return and teachers are still woefully under resourced.
Feel free to wander through https://www.governforcalifornia.org/news/categories/fiscal-affairs to find proposals I've made over the years. It's time for some other people to step up.
Yup, the current investment return assumption is irrelevant to this discussion. In 2006 STRS was assuming 8% on a ~60/~40 stocks/fixed income portfolio. I said they should use 6.2% and fully fund contributions at that rate (they were also not funding the ARC). Because, unlike FASB, GASB allows public pension funds to discount liabilities at the investment return assumption, that also means STRS's liabilities accreted at the investment return assumption, which is a double whammy for the unfunded liability. In any event, it's too late for SFUSD, the damage was done long ago. The only thing your daughter might promote is elimination of OPEB.
Those are only back to 2021. I've been making proposals since 2005, starting with the investment return assumption, then ERISA-allowed reforms to lower benefits for years not yet worked, then accounting changes, GASB governance changes and more, plus OPEB reforms and support for political candidates maybe willing to take on the issues. No success. Others need to engage!
That's for you to figure out. I had a solution 20 years ago.
What investment return were you requesting? Here are the actuals:
As of the most recent reporting in July 2025, the California State Teachers' Retirement System (CalSTRS) achieved a 7.4% annualized return over the 20-year period.
www.ai-cio.com
www.ai-cio.com
This long-term return consistently outperforms the system's actuarial investment assumption of 7.0%, reflecting sustained, long-term growth for pension beneficiaries.
www.ai-cio.com
www.ai-cio.com
+1
Key Investment Performance (As of June 30, 2025)
20-Year Annualized Return: 7.4%
Fiscal Year 2024-25 Return: 8.5%
5-Year Return: 9.4%
10-Year Return: 8.1%
30-Year Return: 7.8%
Total Fund Value: $367.7 billion
If the investment returns used in the actuarial studies are inordinately low, that will cause the contributions to increase and result in fewer dollars for teacher salaries and operations. My daughter is a teacher in LAUSD and starting salary was $54k which is extremely low income by CA AMI standards. The problem is not the investment rate of return and teachers are still woefully under resourced.
Rent seeking has to reject sound analysis. Otherwise, they are not successful.
Solution? Cutback on pension payments?