Benefits & Executive Compensation News

California Analyst Slams Plan to Limit School Pension Payments

May 18, 2020, 3:47 PM

California Governor Gavin Newsom’s move to suspend planned hikes in the state’s contribution rate for school pension payments is “short-sighted” and could weaken the system, according to the state’s nonpartisan Legislative Analyst’s Office.

  • As part of his solution to close a $54 billion budget gap through June 2021, Newsom proposes suspending the ability of the California State Teachers’ Retirement System to raise the state’s contribution rate by 0.5% annually though fiscal 2024
    • Move could save $169m next year: LAO
  • “Reducing CalSTRS’ statutory authority to raise rates now sets a dangerous precedent for future years, opening the door to further changes...

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