Key Takeaways
- Geography: United States.
Analysis
CalSTRS, the California State Teachers’ Retirement System, reported a strong 8.5% net investment return for the fiscal year 2024–25, increasing its total fund value to $367.7 billion as of June 30, 2025. The return exceeds the fund’s custom benchmark by 10 basis points and reaffirms its long-term objective of achieving an average return of 7.0%.
Despite ongoing macroeconomic headwinds such as inflation, elevated interest rates, and global geopolitical tensions, CalSTRS continues to outperform. Its 5-, 10-, 20-, and 30-year average returns all remain above its investment assumption, with the 5-year average return at 9.4% and the 20-year average at 7.4%.
“This return reflects our hard work and innovative approach to protecting the future of more than 1 million California educators,” said CEO Cassandra Lichnock. “It’s another step toward our long-term goal of full funding.”
As of June 2024, CalSTRS' funded status stood at 76.7%, up from 62.6% in 2017 — a 14% increase in seven years. The pension fund is ahead of schedule in reaching its full funding target by 2046, according to actuarial projections.
Chief Investment Officer Scott Chan noted that the diversified portfolio is designed to weather market fluctuations. “While the 8.5% return is a strong result, our commitment is to sustainable, long-term growth,” he stated. “Our portfolio strategy continues to deliver above-target performance.”
Public Equity was the top-performing asset class with a return of 16.3%, followed by Private Equity at 9.7%, Collaborative Strategies at 8.2%, Inflation Sensitive assets at 8.1%, and Fixed Income at 6.5%. However, Real Estate delivered a negative return of -3%, while Risk Mitigating Strategies declined -7.2%, reflecting broader softness in the property and hedge fund sectors.
In terms of allocation, CalSTRS’ investment portfolio as of June 30, 2025, was composed of 41.25% Public Equity, 15.14% Private Equity, 12.78% Real Estate, 11.96% Fixed Income, 7.27% Risk Mitigating Strategies, 6.92% Inflation Sensitive, 2.84% Strategic Overlay and Cash, and 1.84% Collaborative Strategies.
CalSTRS’ performance mirrors similar strength from major U.S. public pension funds in FY 2024–25. CalPERS recently posted a 7.8% return, while the New York State Common Retirement Fund reported gains of 8.2%. Pension funds have increasingly leaned into private markets and inflation-sensitive assets to diversify away from traditional equities and bonds.
The next actuarial valuation report is expected in May 2026 and will provide an updated snapshot of the fund’s liabilities and long-term funding progress.
CalSTRS, established in 1913, is the largest educator-only pension fund in the world, serving more than 1 million members and beneficiaries across California. The average monthly benefit for members retiring in 2023–24 was $5,659, with an average service time of 25.2 years.