California Teachers pension gap up 90% at $43 bln

Jan 29 (BestGrowthStock) – The pensions funding shortfall facing the
United States’ second biggest public pension fund soared 90
percent to $42.6 billion in the year to June 2009.

California State Teachers’ Retirement System (Calstrs) said
it recorded a $42.6 billion shortfall, hurt by investment losses
and up from $22.5 billion a year earlier.

Calstrs posted the funding strategy report of its flagship
Defined Benefit Program, to be presented by chief executive Jack
Ehnes on Feb. 5, on its website.

“Given the 25 percent loss in investments in 2008-09,
however, the funding situation has gotten much worse,” Calstrs
said in the report.

The funding shortfall would reduce the Defined Benefit
Program’s funded ratio to about 77 percent, according to the

If all the losses from 2008-09 were recognized, the
shortfall would increase further to about $78 billion and would
reduce the funded ratio to 58 percent, the fund said in the

The fund will need to seek increases in contributions to
offset the impact of the investment losses, it said.

To fully fund the Defined Benefit Program in 30 years after
the 2008-09 losses would require a contribution rate increase of
about 14 percent, Calstrs said.

In December, Moody’s said it sees a worsening trend in
expected funding shortfalls of both the California Public
Employees’ Retirement System, or Calpers, and the California
State Teachers’ Retirement System. [ID:nN10138869]

Stock Market Today
(Reporting by Sakthi Prasad in Bangalore; Editing by Andrew

California Teachers pension gap up 90% at $43 bln