CalSTRS Board Adopts 2025–28 Strategic Plan; Staff Presents $34–36M Resource Estimate

The California State Teachers' Retirement System board unanimously adopted its fiscal 2025–28 strategic plan at the May meeting after a presentation on the plan’s development and intended implementation. Amy McDuffie of Mosaic Governance Advisers and CalSTRS staff described a board-led process of interviews, working sessions, and benchmarking with peer public pension plans.

Cassandra (CalSTRS CEO) said changes since the January reading were clarifying edits and that approval would permit staff to refine tactical business plans and to present a 2025–26 tactical plan as an information item in July. Julie Underwood, chief financial officer, and Art Martinez, director of financial planning, described an accelerated costing exercise providing a preliminary estimate of incremental resources needed to implement the strategic plan over the three-year cycle.

Art Martinez said staff estimate additional resources of $34 million to $36 million and 65–70 positions. Roughly two-thirds of the midpoint estimate—about $23 million—would support the transition of the pension solution from a project to a permanent program (Benefit Connect), including establishment of a new division (about 39 permanent positions), consultants, licensing and a $3 million transitional gap fund to absorb staff moving off the project. The remaining $12 million is primarily technology-related (AI, cybersecurity, data governance, cloud services) and workforce initiatives. Martinez told the board that about 83% of the cost estimate is in a high-confidence category.

Julie Underwood said the estimate excludes investments-branch asks and excludes costs that would not result in operating budget increases. She reiterated that the estimate is informational and that any funding requests would go through the regular budget cycle and be presented in September and November for board review and approval.

Board members asked clarifying questions about how project staff would be absorbed into permanent roles, the purpose of the $3 million transitional funding, and the effect of the state's May Revision and fiscal outlook on budgeting. Staff said the temporary funding would cover gaps while staff transition from project-funded positions; some project staff may compete for the permanent roles but the organization will not create positions solely to absorb individuals. CalSTRS staff and independent project oversight agreed to continue refining estimates and present precise resource requests later in the year.