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Retired California teachers could be receiving checks to help with inflation.
Almost 55,000 retired teachers could potentially receive new payments to supplement pensions under a new proposal through the California State Legislature. Named Senate Bill 868, this proposal would provide quarterly payments to teachers who retired before 1999, aimed at offsetting inflation. The proposal, introduced by Senator Dave Cortese, would provide additional payments on top of two other inflation-based CalSTRS benefits. The proposal could increase 5% to 15% of pensions depending on retirement year of applicants, with those who retired before 1980 eligible for the largest financial bumps, according to a summary prepared by the California State Teachers’ Retirement System.
The legislation made it through the state Senate last week, and The CalSTRS board supported the proposal earlier this year. It requires approval from both Governor Gavin Newsom and the Assembly in order to become law. According to CalSTRS, the new benefit would cost about $592 million, and the money would come from a 1989 account established to help retired educators cope with inflation. The account, separate from the system’s $318 billion investment fund, is supported by the state’s general fund, which includes revenue from leased school lands and payments related to federal land grants to California schools and educational institutions.
Inflation in the country, recently measured in federal indexes, rose 4.4% in the fiscal year ending June 30, 2021 according to CalSTRS, and is on pace to exceed 4% for the year ending later this month.