Governor Jerry Brown has signed a State Assembly bill that will fund the teachers' retirement system through annual contributions of school districts, teachers and state government.
"This bill will ensure a decent retirement for hundreds of thousands of teachers, both now and for decades to come," Brown said.
Before AB 1469, the California State Teachers' Retirement System (CalSTRS) was only 67% funded and would have run out of money in 33 years
According to bill author assemblyman Rob Bonta (D-Alameda), the first year's contributions total approximately $276 million and would grow in subsequent years to more that $5 billion annually. This is projected to eliminate the unfunded liability in the system by 2046.
"Our dedicated teachers work tirelessly to prepare our kids for college and career, and they deserve stability in their pension system," said Senate President pro Tem Darrell Steinberg. "This shared responsibility between the state, teachers and school districts is a necessary step towards assuring the fund's integrity, and will lift a huge burden from the state's long term financial responsibility."
Chairman of the Teachers' Retirement Board Harry Keiley said the Governor demonstrated leadership and showed commitment to a sustainable retirement system for California's educators by signing the bill.
"This historic legislation allows CalSTRS to embrace its future with confidence and optimism knowing that a sound funding plan is firmly in place," Keiley said.