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The California State Teachers’ Retirement System saw a 13.9% return on investment for the 2025-26 fiscal year, which is up from last year’s 8.5% return.
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“This is a significant step toward achieving full funding, which is vitally important to fulfilling our mission to secure the financial future of California’s public school educators and their beneficiaries,” Chief Executive Officer Cassandra Lichnock wrote in a statement.
Tuesday’s announcement brings the total Teachers’ Retirement Fund to $415.4 billion, as of June 30. The agency aims to maintain an average return of 7% to meet pension obligations. The 10-year return is at 9.4%, 20-year at 7.5% and 30-year at 7.8%. CalSTRS — the largest educator-only fund in the world — is ahead of schedule to fully fund pension obligations by 2046.
As of June 30, nearly 80% of pension obligations are funded, according to the announcement. This is the eighth consecutive year CalSTRS has made progress toward the goal.
“Our ability to attain returns above 7% over the long term in an increasingly complex market demonstrates the success of our diversified investment approach, risk management and ability to outperform our policy benchmark,” Chief Investment Officer Scott Chan wrote in a statement.
Keith Brainard from the National Association of State Retirement Administrators said it’s important to consider long-term results when deciding if a pension system is healthy.
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“It’s a marathon, not a sprint,” he said. “CalSTRS and other public pension funds are not really focused on one-year returns. They’re looking at long-term returns.”
Brainard also said CalSTRS’ return is similar to other pension systems this year. The California Public Employees’ Retirement System had a 14.8% yield for the same time period — up from 11.6% last year.
“Public equity markets have been strong in recent years — the U.S. stock market, especially, but I think foreign global markets also have been strong,” Brainard said.
Many state pension funds, like CalSTRS, have diversified portfolios, according to Brainard, which also helps bring long-term success. About 43.4% of CalSTRS’ investment portfolio are in stocks, according to Tuesday’s announcement, followed by 13.5% in private equity 12.3% in fixed income and 11.9% in real estate.
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This story was originally published August 4, 2026 at 11:29 AM.