CalSTRS compensation committee launches labor benchmark study and policy review

The California State Teachers Retirement System Compensation Committee on Oct. 25 heard staff and consultant briefings to begin a labor market benchmark study and a comprehensive review of the board—s compensation policy and administrative procedures.

Crystal Turco, CalSTRS staff, described item 2 as “an information item focused on the initiation of the labor benchmark study via the CEO delegation.” Turco said staff plans to procure McLaughlin Aon to conduct the labor benchmark analysis of base salary ranges and incentive opportunities for positions under the board—s compensation authority; the last benchmark study was completed in 2024 and the last change to incentive opportunities was approved in June 2019.

The committee also heard an item introducing a scheduled, comprehensive review of the compensation policy and administrative procedures. Mercer consultants Josh Wilson and Susan Lemke told the committee they had performed a preliminary review and will interview committee members before presenting recommendations. “We—ve had the opportunity to do a preliminary review of the policy and part of our goal between now and March is to be able to talk with each of the board members,” Wilson said.

Committee members pressed for clarity on analytic choices and timeline. Chair Keeley emphasized the board—s central goals for compensation: “Attraction, retention, and rewarding, and being fair and competitive in today—s marketplace,” and asked the consultants to examine comparator-group formulas (the current mix of public- and private-sector peers), the weighting of incentive categories and whether remote-work patterns should factor into future compensation design. Several members asked that the review quantify retention differences tied to pension reform and stress that any new approach remain simple and defensible.

According to staff, the labor benchmark study will follow CalSTRS practice of engaging an external expert familiar with established comparator groups; McLaughlin Aon is proposed to do the primary market analysis and Mercer will present summary findings to the committee. Staff said the full benchmarking deliverable will be available in March 2026, with either action taken in March or a first-reading/information step in March and final action in May 2026 to ensure decisions are in place before the July 1 plan year start.

On the policy review, Mercer said the review will begin in fall 2025, include one-on-one interviews with compensation-committee members (with the option to expand interviews to other board members at the chair—s direction), and return initial recommendations to the committee in March 2026 and final recommendations in May 2026. The consultants said they aim to ensure the written policy is clear, modern and aligned with CalSTRS strategic goals.

Procedural actions at the start and end of the meeting: the committee approved the meeting agenda and later approved the minutes. Both approvals were recorded as passed by voice or roll-call with ayes recorded and no objections.

What happens next

Staff will procure McLaughlin Aon to complete the labor market pay analysis, and Mercer will complete the compensation-policy review process with interviews and staged recommendations in March and May 2026.

Votes at a glance

- Motion to approve the meeting agenda: moved and seconded (mover/second not specified in the record); outcome: approved (voice/roll call); tally: yes 4, no 0, abstain 0.

- Motion to approve minutes: moved and seconded (mover/second not specified in the record); outcome: approved (roll call); tally: yes 4, no 0, abstain 0.

(These procedural approvals were recorded in the meeting transcript; no substantive action or adoption of policy changes took place at this meeting.)