CalSTRS Announces 6.3% Returns
Posted on 07/28/2023
New data out of CalSTRS indicates pension giant earned a 6.3% return for 947,000 of California’s public retirees. The total fund value has climbed to US$ 315.6 billion.
According to CalSTRS: “The 2022–23 return keeps CalSTRS on track long term, as the 3-, 5-,10-, 20- and 30-year returns, including the 10.1% 3-year return, all surpass the actuarial assumption of 7.0% despite inflation, rising interest rates and global sociopolitical uncertainty. Per industry standards, the valuations and benchmark returns of the private assets—primarily held within Real Estate, Private Equity and Inflation Sensitive, which account for more than 30% of the CalSTRS Investment Portfolio—lag three months. CalSTRS’ public assets are valued through June 30, 2023, while private assets are valued through March 31, 2023.”
CalSTRS anticipates full funding by 2046. It is 74.4% funded currently. CEO Cassandra Lichnock said: “Our highly diversified portfolio has helped weather the past few years of uncertainty, and our multiyear returns, including this improvement from the previous fiscal year, demonstrate that we remain on track to achieve full funding.”
Despite the good news, CalSTRS did not beat its benchmark: “CalSTRS slightly underperformed its total fund benchmark in 2022–23 by three basis points (equivalent to 0.03%), but outperformed its benchmarks in multiple asset classes. Benchmarks are set by the Teachers’ Retirement Board, which governs CalSTRS.”