California Teachers’ Pension Bailout Would Hit School Budgets


The Los Angeles Times (5/22, Blume, Megerian) reports California officials and educators say that “a plan to bail out the retirement fund for teachers” could cause “difficult cutbacks” at public schools and may not eliminate the pension deficit if investments fall below expectations. Under the plan, the California State Teachers’ Retirement System’s $74-billion shortfall would be addressed by raising school districts’ pension contribution to 9.5% of payroll from the current 8.25%, a trend that would continue until it hit 19.1% after seven years. Meanwhile, the system of school funding has changes, so that “school districts will receive additional money for students who are low-income, struggling to learn English or in foster care.”