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Antonucci: California Federation of Teachers wants changes in the pension system

Mike Antonucci | April 17, 2018

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Mike Antonucci’s Union Report appears weekly at LA School Report.

The California Federation of Teachers held its convention in Costa Mesa March 23-25. Delegates set the union’s agenda for the coming year in the form of 29 resolutions. These covered a wide array of issues from kindergarten class sizes to limiting the number of administrators in adult education programs.

One topic seemed to occupy the delegates more than any other: the California State Teachers’ Retirement System (CalSTRS). Three resolutions would have significant impact on the system if their provisions were to be enacted into law.

Resolution 16 directs the union to sponsor legislation requiring all charter schools to participate in CalSTRS.

Charters are currently given the option of enrolling teachers into CalSTRS or providing other qualified retirement plans. According to CFT, more than 85 percent of charter schools use CalSTRS, but the union is concerned that charters will increasingly opt out, “making it incrementally more difficult for CalSTRS to achieve full funding,” according to the resolution.

Resolution 17 directs the union to pressure CalSTRS into divesting from companies “that enable privatizers of public education.” This is the latest in a series of divestment efforts that have often caused friction between teacher unions and pension fund managers, who have a fiduciary responsibility and not necessarily a sociopolitical one.

While naming no individual companies, this CFT resolution is extremely broad, referencing charter schools and education management companies, Common Core curriculum vendors and privately provided student services. The resolution calls on CFT to “have our members’ retirement funds avoid investing in, and where appropriate, divesting from, any of the corporations or money managers that lobby for and profit from privatizing public schools and/or attacking defined benefit pension plans.”

It also directs CFT to avoid investing the union’s own employee pension fund money in those companies.

Resolution 21 may appear surprising to many. It suggests that the 2014 legislation increasing all contributions to CalSTRS to correct a $74 billion unfunded liability was too aggressive. The goal of that law was for CalSTRS obligations to be 100 percent funded by the year 2046.

The resolution states that current pension contributions place “a heavy burden on employers” that is fast approaching more than 19 percent of their total staffing expenditures.

It is odd to find CFT worried about employers’ burdens, much less wanting to do something about it, but its motives aren’t entirely altruistic.

The authors of the resolution believe that the level of required pension contributions “has already resulted in the stagnation or reduction of employee compensation, including cost-of-living adjustments, during a time when districts and (local education agencies) are unable to fully staff their classrooms.”

The resolution directs CFT to sponsor legislation that would reduce the CalSTRS goal from 100 percent funded to 80 percent funded by 2046. The union believes this will make the pension system sufficiently healthy and free up funds for salary increases.

To help accomplish these and other political goals, CFT’s convention delegates approved an immediate special assessment of $2 per member per month that will continue through August 2020.

One dollar will go to the “Legal Advocacy and Fight Back Fund” to be used for “proactive
and defensive CFT statewide legal actions.” The other dollar will go to the “Strategic Organizing Fund” for internal and external organizing.

Each CFT member already automatically contributes $3.65 per month to the union’s political action committee.

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