CalSTRS committee launches market pay study and a full review of compensation policy

The California State Teachers Retirement System Compensation Committee kicked off two linked efforts to update how the system pays and rewards staff, approving the start of a labor market benchmark study and initiating a comprehensive review of compensation policy.

Crystal Turco, CalSTRS staff, told the committee the labor benchmark study would be initiated via the CEO delegation and is intended to “ensure staff compensation stay in line with the competitive market.” Staff plans to engage McLaughlin and Aon to analyze base salaries and incentive opportunities across the positions under the board’s compensation authority.

Mercer, the board’s compensation consultant, will lead a separate but related review of compensation policy and administrative procedures. Mercer representatives said the review — the first comprehensive policy review since 2009 — aims to make policy materials clearer, align incentive programs with the board’s strategic goals and ensure practices reflect industry best practices. A Mercer consultant said they want “to make sure that the materials are clear and easy to understand” and to surface any areas needing reorganization or clarification.

The committee discussed timing and next steps. Crystal Turco said staff expects a completed study in March 2026 and typically brings results back for committee action; in the prior cycle the study was presented for information in March and the committee took action in May. The committee stressed there is flexibility but asked that any action be completed before the plan year begins on July 1.

Members pressed for specific analytical priorities they want the consultants to address. Committee members asked for retention metrics and data that quantify the benefits of defined-benefit employment, clarification of comparator-group formulas (for example how much weight is given to public versus private comparators), and analysis of whether the comparative group remains relevant in today’s market. One member requested the consultants explain the rationale behind the formulas that determine comparator weightings.

Mercer said it will begin by interviewing members of the compensation committee and then expand to additional board members if the chair directs. The firm will present initial findings and recommendations to the committee in March 2026 and return with final recommendations in May 2026, per staff’s schedule.

The committee did not take substantive policy action at the meeting; these items were presented as information and as initiation of delegated work. The meeting record shows staff will procure specified vendors for the pay analysis and that Mercer will conduct the policy review. The committee closed the discussion by reiterating the board’s priorities: attract, retain and reward talent while keeping policies understandable and defensible.

The committee set no new effective policy changes at this meeting; the next committee steps are contractor procurement, member interviews and the March 2026 preliminary report followed by the May 2026 final recommendations.