Welcome to the latest edition of This Week in Pensions! We have gathered the best stories about pensions and retirement security from the previous week. You need to know this news in the fight for a secure retirement.
CalSTRS announced that the state’s pension fund outperformed, ending the year with $341.4B
The California State Teachers’ Retirement System (CalSTRS) announced Tuesday that the state’s pension fund outperformed anticipated returns, ending the year with a total value of $341.4 billion.
The return goal to meet pension funding obligations for its one million plus public school educator members is 7%. CalSTRS announced that in 2023, the return on investments reached 8.4%, exceeding expectations by an entire percent.
This is a remarkable achievement in spite of uncertainty in the global economy and rising interest rates. According to Chief Investment Officer Scott Chan, this was achieved due to sound investment strategies and a diverse portfolio. He continued, “While the 8.4% return over the past year is commendable, our true commitment lies in fostering consistent, long-term growth for our members’ pensions.”
In addition to providing a consistent and equitable retirement for life, the pension fund also provides disability and survivor’s benefits for members who need them. When robust pension systems such as CalSTRS utilize fiscally responsible investment practices to create consistent and increasing growth, the stability of these benefits is perfectly aligned.
Ballot measure would let firefighters get full pensions three years earlier.
In November, voters in San Fransisco will decide if firefighters can retire with their full pension three years earlier than most can now.
Since 2012, city firefighters in San Francisco have had a retirement age of 58, up from 55. Firefighters hired before this change have been grandfathered in, creating a two-tiered system of when the workers can retire. Advocates for this change cite new data that suggests firefighters have a significantly higher risk for cancer compared to other city workers.
This measure, unofficially known as the “Fire Department Service Retirement Pension,” has backers from the firefighters union, the entire board of supervisors, and mayoral candidates Daniel Lurie and Mark Farrell.
For firefighters hired after 2011, the city uses a factor related to their age at retirement, ranging from 2.2% per year of service for 50-year-olds to 3% per year of service for those 58 and older.
The proposed measure would increase the factor and decrease the number of years until it maxes out. Under the charter amendment, it would go from 2.4% per year of service for those retiring at 50 to 3% for each year of service for those retiring at 55 or older.
Multiple studies have concluded that working as a firefighter can be a risk for cancer; the National Institute for Occupational Safety and Health, the International Agency for Research on Cancer, and the National Institute of Standards and Technology all have released studies showing that firefighters face tremendous risks of cancer in addition to the already life-threatening work they experience every day.
Due to the excessive risks firefighters face compared to other city employees, the measure will lead to earlier retirements for firefighters, who have shorter careers than other workers, and provide a more equitable retirement for heroes who protect us.
Be sure to check back next Friday for the latest news in the fight for a secure retirement! For now, sign up for NPPC News Clips to receive daily pension news from across the country directly to your inbox.