(AP) - California's massive teacher pension system is downgrading its investment earnings forecast, a move that will raise retirement costs for the state and for some educators.
The California State Teachers' Retirement System board voted Wednesday to adopt a 7 percent earnings assumption, down from 7.5 percent.
The decision reflects expectations for lower expected returns on global investments in the coming decades. Financial consultants say there's less than a 50 percent probability that CalSTRS will hit its current 7.5 percent annual earnings target.
The change means about 80,000 teachers hired since 2013 will see their pension contributions increase by about 1 percent of their wages. It will be phased in over two years.
Gov. Jerry Brown's budget proposal set aside an additional $153 million to cover the state's share of higher costs.