CalSTRS boasts 13.9% return, bringing progress toward pension obligations - Sacramento Bee

The California State Teachers' Retirement System (CalSTRS) posted a 13.9% return on investment for the 2025-26 fiscal year, up from 8.5% in the previous year, according to an announcement made Tuesday. The announcement put the total Teachers' Retirement Fund at $415.4 billion as of June 30. Chief Executive Officer Cassandra Lichnock called the result "a significant step toward achieving full funding," and said it advances the fund's mission to secure the financial future of California's public school educators and their beneficiaries.

The fund's funded status is approaching 80%, and CalSTRS, which describes itself as the largest educator-only pension fund in the world, is ahead of schedule to fully fund its pension obligations by 2046. The fund aims to maintain an average return of 7% to meet those obligations. Its annualized returns are 9.4% over 10 years, 7.5% over 20 years, and 7.8% over 30 years. Chief Investment Officer Scott Chan attributed the ability to exceed 7% returns over the long term in an "increasingly complex market" to the fund's diversified investment approach, risk management, and ability to outperform its policy benchmark.

According to the announcement, about 43.4% of the portfolio is allocated to stocks, followed by 13.5% in private equity, 12.3% in fixed income, and 11.9% in real estate. Keith Brainard of the National Association of State Retirement Administrators said long-term results are the appropriate measure of pension health, noting that public pension funds "are not really focused on one-year returns." He said CalSTRS' result is in line with peers this year, citing the California Public Employees' Retirement System (CalPERS), which reported a 14.8% return for the same period, up from 11.6% last year. Brainard attributed strong recent results in part to robust public equity markets, particularly in the U.S., and noted that many state pension funds benefit from diversified portfolios.