Home California Fiscal Issues and Information page Controller to Audit CalSTRS Efforts to Curb Pension Spiking

Controller to Audit CalSTRS Efforts to Curb Pension Spiking

State Controller John Chiang is launching an audit to test the California State Teachers' Retirement System’s (CalSTRS) efforts at identifying and preventing pension spiking. The audit was prompted by a growing number of concerns inside and outside the fund's administration, and during a time when CalSTRS is revamping its own investigations unit.

CalSTRS currently uses automated programs to flag excessive salary bumps from one year to the next. The pension system also conducts school district audits that identify inconsistent or accelerated pay increases during an employee's final compensation period. The Controller's audit will review the efficacy of each of these programs and, if warranted, present recommendations for improving performance.

The audit should take approximately two months, and the full results will be made public once the investigation is complete.

Pension spiking occurs when pay during the final compensation period is artificially inflated beyond reasonable for the purpose of increasing the pension benefit. The Controller, who is the State's top fiscal officer, serves on the CalSTRS board. CalSTRS is the nation's largest teachers' retirement fund, with more than 850,000 members and $139.2 billion in assets.