An announcement on CalSTRS Web site said Assembly Constitutional Amendment 23 would give public educators hired after July 1, 2007 the choice between a 401(k) style plan or a combined 401(k)/defined benefit plan.
According to the announcement, the opposition was centered on the threat the bill would present to the financial stability of the current fund. Under the proposal, the current plan would be closed to contributions to new members, affecting the long-term funding of benefits.
The Sacramento Bee painted a picture of a divided Board, saying six trustees voted against the bill, while five abstained. Four of those were appointees of Governor Arnold Schwarzenegger, who said they were not prepared to consider the issue. According to the Bee, i f Representative Roger Kozberg, the governor’s fifth appointee, had been present, the outcome might have been different.
After a similar measure was rejected by the Board earlier this year, Schwarzenegger removed four trustees Administration officials said were not qualified to carry out the governor’s overhaul initiative. As payback, the board rejected the governor’s next appointment (See Political Infighting Leaves CalSTRS Board with 7 Members).
CalSTRS, with $132 billion in assets, is the third-largest public pension fund in the US. It provides retirement, disability and survivor benefits to California’s public school teachers from kindergarten through community college, serving more than 755,000 members and their families.