Ninth annual report highlights members' longevity and importance of early career education
News release | Thomas Lawrence
WEST SACRAMENTO, Calif. (February 9, 2023) – The California State Teachers’ Retirement System today released its 2021–22 Sustainability Report, an annual snapshot of CalSTRS’ organizational sustainability.
CalSTRS reported on corporate sustainability topics, including member retirement education; progress of the CalSTRS Funding Plan; privacy and information security; the path to net zero; sustainable operations; CalSTRS’ management of its workforce and employee wellness; and diversity, equity and inclusion.
“Our long-standing focus on sustainability and resiliency served us well last fiscal year and sets us up for long-term success,” said Cassandra Lichnock, CalSTRS chief executive officer. “We constantly adjusted to meet each unprecedented challenge on behalf of our members, as we worked through soaring inflation, the COVID-19 pandemic, geopolitical turmoil, and the many floods and wildfires related to climate change.”
Member retirement education
- California’s public educators live longer than the average U.S. population, making it essential they have enough savings to last through retirement. With that in mind, CalSTRS makes a point of engaging with members from early in their career onward to promote better retirement security.
- Supplemental savings are key for retired CalSTRS members, which is why CalSTRS offers voluntary, low-cost Pension2® 403(b), 457(b), Roth 403(b) and 457(b) plans. CalSTRS continues to inform its members about these options through newsletters, member toolkits, webinars, videos and online calculators.
CalSTRS Funding Plan progress
- CalSTRS is on schedule to reach full funding for the Defined Benefit Program by 2046, under current actuarial assumptions.
- The funding plan reflects a shared commitment by members, employers and the State of California to fully fund the Defined Benefit Program and ensure the long-term sustainability of the Teachers’ Retirement Fund.
Path to net zero
The commitment to achieve net zero greenhouse gas emissions in the CalSTRS Investment Portfolio by 2050 or sooner builds on nearly 20 years of influencing global sustainable business practices and public policies. Net zero means that companies in CalSTRS’ portfolio will not emit any greenhouse gases unless they are offset by reductions.
In 2022, the Teachers’ Retirement Board adopted four additional measures:
- Reduce greenhouse gas emissions across the portfolio by 50% by 2030.
- Incorporate a comprehensive analysis of greenhouse gas emissions into investment decisions.
- Allocate 20% of the Global Equity Portfolio to a low-carbon index to help reduce emissions.
- Integrate various climate-related scenarios into CalSTRS’ study of asset allocation and liability management to help guide investment decisions.
Diversity, equity and inclusion
- CalSTRS participates in diversity and inclusion efforts internally and across the investment management industry. The CalSTRS Investments team also promotes diversity on the corporate boards of companies in which it invests.
- Internally, CalSTRS strives to increase inclusion and foster a workplace where all staff are treated with respect and feel like they belong. Efforts include addressing competence, dignity, organizational development and social justice.
- CalSTRS publishes an annual Diversity in the Management of Investments report. The new edition, which for the first time will incorporate details on the participation of diverse and emerging managers, as required by Assembly Bill 890 (Chapter 472, Statutes of 2021), will be released before March 1, 2023.
The Sustainability Report follows the Global Reporting Initiative Standards, which are recognized as a global best practice for impactful reporting.
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CalSTRS provides a secure retirement to more than 1 million members and beneficiaries whose CalSTRS-covered service is not eligible for Social Security participation. On average, members who retired in 2021–22 had 25 years of service and a monthly benefit of $4,809. Established in 1913, CalSTRS is the largest educator-only pension fund in the world with $302.1 billion in assets under management as of December 31, 2022. For more information, visit CalSTRS.com.