California teacher pension fund delays rate decision

SACRAMENTO — The board of the California State Teachers' Retirement System has delayed a decision about whether it should decrease the expected rate of return on its investments.

The returns are used to pay pension benefits to retired teachers.

Local school districts and the state also contribute money. If the fund sees smaller-than-anticipated returns, school districts and the state would be asked to pay more to make up the difference.

Economists have predicted that unfunded pension obligations for government employees could cost states tens of billions of dollars in coming years.

CalSTRS' expected annual rate of return has been set at 8 percent since 1995. The board decided Friday that it will revisit the matter in November.

Copyright 2010 The Associated Press.

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