The California State Teachers’ Retirement System (CalSTRS), the second-largest public pension fund in the United States, has reported an 8.5 per cent return for its most recent fiscal year. This performance surpassed the fund’s 7 per cent annual target. CalSTRS manages approximately $US368 billion ($572 billion). It is currently ahead of schedule to achieve full funding by 2046, according to a preliminary returns statement. As of June 30, 2024, the pension could cover 76.7 per cent of its future obligations. CalSTRS aims to provide retirement, disability, and survivor benefits to California’s public school educators. The fund invests globally across a range of asset classes to meet its long-term obligations.
Despite exceeding its own target, CalSTRS’s returns lagged behind those of the California Public Employees’ Retirement System (CalPERS) for the second consecutive year. CalPERS, the largest public pension fund in the US, reported an 11.6 per cent gain for the same fiscal year, boosting its assets to $US556.2 billion. This difference in performance highlights the diverse investment strategies and asset allocations employed by the two pension funds.
CalSTRS’s public equity investments delivered the strongest returns, at 16.3 per cent, for the fiscal year ending June 30. The fund’s private equity strategy also performed well, gaining 9.7 per cent. Collaborative strategies advanced 8.2 per cent. However, real estate and risk-mitigating strategies underperformed, falling 3 per cent and 7.2 per cent respectively, relative to their benchmarks. These results indicate varying degrees of success across different asset classes within the CalSTRS portfolio.
