The California State Teachers' Retirement System, the fourth-largest U.S. public pension fund, said Wednesday that it could see the gap between its assets and its obligations to pensioners multiply by 21 times to almost $47 billion in the next decade.
CalSTRS' unfunded liability, which occurs when a pension fund's total value falls below projected long-term obligations to pay benefits to retirees, could grow from $2.2 billion in 2002 to $46.7 billion in 2012, according to a preliminary study conducted by the pension fund.
The widening gap is in part because of stock market losses in the last three years that shrank the fund's assets.
CalSTRS had no unfunded liability as recently as 2000 after gains in the stock market had boosted the pension fund's total market value to $110 billion. The fund suffered losses in the last three years, dropping its total value to $92 billion. It lost 5.9% last year.