CalSTRS has received $315 million from the U.S. Congress since 1999.
In 2015, the pension fund will receive one final payment from Congress totaling $15.6 million.
What’s the purpose of the payment, and why are they stopping?
The Daily Journal News explains:
The California State Teachers’ Retirement System (CalSTRS) will receive its final $15.6 million payment of compensation from the 1997 sale of the Elk Hills Naval Petroleum Reserve as part of the $1.1 trillion budget appropriation bill passed by Congress Saturday.
The federal government began making payments to CalSTRS under a settlement agreement two years after the Elk Hills land was sold to Occidental Petroleum in 1997. The annual payments, each of which was subject to an annual Congressional appropriation, compensated CalSTRS for its interest in the state school lands that were part of the Elk Hills Reserve.
The petroleum reserve sits on 47,000 acres near Bakersfield, and the two tracts of state school lands in it were dedicated to California’s schools by the federal government upon statehood in 1850. It became a Naval Petroleum Reserve shortly before World War I, about the same time as California established the Teachers’ Retirement System in 1913.
“This final payment is welcome support to California’s retired educators, the oldest of whom greatly benefit from these proceeds, which support efforts to safeguard retiree pensions from the erosive effects of inflation,” said CalSTRS Chief Executive Officer Jack Ehnes. “State law directs any proceeds from state schools lands, on which the petroleum reserve sat, to support retired teachers’ pensions when they fall below 85 percent of their original purchasing power.”
CalSTRS manages $190 billion in assets.
Photo by Stephen Curtin