Pension fund for California teachers hits $400B in bull market

The California State Teachers Retirement System announced that the teachers' retirement fund reached $415.4 billion, a valuation that some economists said is the result of a bull market.

The announcement about the pension fund was made in a board meeting in September. A "bull market" is when stock prices are rising by a significant amount.

“This is encouraging news for California’s educators who dedicate their careers to serving our students,” Assemblymember Tina McKinnor, D-Inglewood and chair of the Assembly Public Employment and Retirement Committee, told The Center Square on Tuesday. “Their retirement security must remain a priority for the state of California, making sure people can retire in dignity and that the money is there.”

According to the California State Teachers Retirement System, the teachers' retirement fund went up 13.9% in fiscal year 2025-26, significantly ahead of the 0.4% growth benchmark agency officials sought. The fund’s return on investment shows that returns were strongest in private equity, as well as inflation-sensitive investments and risk-mitigating strategies. Real estate, another investment asset class some of the retirement fund was invested in, yielded $49.4 billion in the fiscal year ending June 30, 2026, according to the retirement system.

Private equity dropped slightly – 1.9% in the six months ending March 31, 2026. That part of the retirement fund’s investment portfolio was valued at $58.7 billion.

“This means that CalSTRS management is doing a good job in managing to beat their benchmark,” Jay Rogers, president and chief investment officer of Alpha Strategies Investment Consulting, told The Center Square on Tuesday. “For the teachers who are part of that plan, it means that there’s a little bit more security that they will be able to more fully fund their retirements.”

Despite the higher-than-expected return on investment for California teachers’ pension fund, as of 2025, that fund was still only able to meet 79% of its funding obligations, Rogers said.

“Of that number the actuary told them that they need to fund all their future obligations, they are just over 20% below that number,” Rogers said. “Meaning that these years that they’re outperforming are good because they are catching up faster. But there are a few plans out there like New Jersey and Illinois that are somewhere in the range of 39% or 40% funded, and at that point, it’s almost impossible to make up the lost ground to get to be positive.”

Wayne Winegarden, an economist with Pasadena-based Pacific Research Institute, told The Center Square on Tuesday that the retirement fund saw gains this year because of a bullish stock market, not necessarily because of smart investments made by agency officials.

“Obviously, it’s a good thing – a 14% return is what you want to see,” Winegarden said. “So that’s something to be happy about, but we also need to be careful. This doesn’t necessarily mean that the unfunded liability is sustainably addressed.”

While officials from the California State Teachers Retirement System declined to comment for this story, the agency’s chief investment officer said in the September board meeting that the $400 billion valuation was a big achievement for the state’s teachers retirement fund.

“Surpassing $400 billion is an extraordinary milestone for CalSTRS,” Scott Chan, chief investment officer for the California State Teachers Retirement System, said at the meeting. “But $415 billion is just a number. It represents the retirement security of more than 1 million California educators. We exist to secure their retirement future.”