CalSTRS Board Opposes State Budget Proposal Threatening Inflation Protection Program.SACRAMENTO, Calif. -- The Teachers' Retirement Board voted today to oppose the Administration's state budget proposal affecting the CalSTRS inflation protection program for retirees. The proposal would: 1. Unconditionally guarantee the purchasing power Purchasing Power 1. The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing power is important because, all else being equal, inflation decreases the amount of goods or services you'd be able to purchase. 2. benefit at the current 80 percent level, regardless of the rate of inflation 2. Reduce the state's contribution to the program from the current 2.5 percent of payroll to 2.2 percent of payroll The board members' opposition to the proposal centered on the significant probability, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. outside actuarial ac·tu·ar·y n. pl. ac·tu·ar·ies A statistician who computes insurance risks and premiums. [Latin and fiduciary fiduciary (fĭd  `shēĕ'rē), in law, a person who is obliged to discharge faithfully a responsibility of trust toward another. counsel, that the guaranteed benefit might exceed available resources in
the future.
"We're concerned about this proposal and its threat to the long-term stability The long-term stability of an oscillator, the degree of uniformity of frequency over time, when the frequency is measured under identical environmental conditions, such as supply voltage, load, and temperature. of the trust fund," said Dana Dillon, board chair. "While this benefit would be assured for our members, the funding would not be assured and could put the trust fund at risk." The state budget proposal must go through the legislative process, which includes hearings and votes by the Legislature before the Governor signs the budget into law. The annual deadline for enacting the state budget is June 15. With a $159 billion investment portfolio, the California State Teachers' Retirement System is the second-largest public pension fund in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . It provides retirement, disability and survivor benefits to California's nearly 800,000 public school educators and their families. |
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