Investment Committee of CalSTRS Examines Four Factors
Investment committee members of the $164 billion California State Teachers’ Retirement System (CalSTRS) may vote this Summer on factors during a planned session dubbed the CalSTRS Interactive Risk Tolerance Voting Session. Through previous committee meetings at CalSTRS, board members agree that a risk class allocation framework may be a better solution than the traditional asset class framework.
CalSTRS – Four Key Decision Factors
- Return-Oriented – Seek to improve the relative funded status over the next 30 years. – Horizon: 3-30 Years
- Return-Oriented – Seek to maximize the 20 year geometric real return. – Horizon: 0-10 Years
- Risk-Oriented – Avoid significant asset drawdown within the next 10 years. – Horizon: 0-10 Years
- Risk-Oriented – Minimize the likelihood of Pay-As-You-Go (Paygo) status beyond 10 years. – Horizon: Years 5-33
Once the factor weights are selected, there will be a process to amend the investment policy of CalSTRS.
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