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Commentary Rebuttal: CalSTRS' Side of the Story

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(Sacramento, CA)
Friday, July 15, 2011

Ginger Rutland's claim that CalSTRS ignores pension spiking - that's the raising of compensation to increase a member's pension - just runs contrary to the facts.  

First of all, we check all employer reports using an automated program that raises an alert when pay increases or other compensation go above specified limits.  Employers must address these issues before CalSTRS processes a retirement report.

Moreover, CalSTRS' has a school district audit program. As an employee nears retirement, the program identifies salary increases that are inconsistent with career pay or within a class of employees. If spiking is found, CalSTRS reduces the benefit to the appropriate level, and collects any overpayments.

One common complaint is that spiking investigations take too long. The fact is, the results of an investigation can affect a member's retirement income for the rest of her life. We want to get it right, so CalSTRS takes great care in determining whether spiking actually occurred - and that takes time.

Looking ahead, CalSTRS is taking added steps to prevent spiking. First, the board supports pending anti-spiking legislation, if amended to limit how much compensation counts towards a monthly pension. Also, CalSTRS staff is finalizing plans for an anti-spiking unit and for a special hotline to report spiking. 

CalSTRS has a responsibility to ensure that retired educators receive the benefits they've earned for their service in California's public schools. We're committed to preventing spiking and to protecting the long-term integrity of the retirement fund.


Ed Derman is Deputy Chief Executive Officer with the California State Teachers Retirement System.

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