SACRAMENTO (AP) — The pension fund for California’s teachers is facing a $56 billion shortfall, even as its investments are doing better than expected.
The drop reported Thursday is enough to trigger an automatic increase in the amount the state must pay into the nation’s second largest public pension fund. Payments from California’s general fund will increase by 20 percent in the coming fiscal year, to $688 million.
The shortfall grew by more than $15 billion in one year. The fund now has enough assets to cover just 71 percent of what it will owe retirees over the next 30 years.
That’s mainly because it suffered huge losses during 2008 and 2009. Even though investments have been rising faster than expected for the past 18 months, it’s not enough to offset the losses.
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