california state teachers’ retirement system …we model best practices in our industry and...

BUSINESS PLANFiscal Year 2018–19

CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM

This page intentionally left blank.

4 Mission, Vision, Core Values

5 Board Strategic Goals

6 Strategy Map

7 Goal 1: Financial

11 Goal 2: Member/Employer

13 Goal 3: Business Transformation

18 Goal 4: Workforce Transformation

22 Budget and Resources

TABLE OF CONTENTS

TABLE OF CONTENTS | 3

4 | CALSTRS BUSINESS PLAN FY 2018–19

OUR MISSIONSecuring the financial future and sustaining the trust of California’s educators

OUR VISIONYour Reward—A secure retirement

Our Reward—Getting you there

OUR CORE VALUESThe CalSTRS Core Values are a set of attitudes, beliefs and behaviors that define CalSTRS and its employees.

CUSTOMER SERVICEWe never compromise on quality as we strive to meet or exceed the expectations of our customers.

ACCOUNTABILITYWe operate with transparency and accept responsibility for our actions.

LEADERSHIPWe model best practices in our industry and innovate to achieve higher standards.

STRENGTHWe ensure the strength of our system by embracing a diversity of ideas and people.

TRUSTWe conduct ourselves with integrity, acting ethically in every endeavor.

RESPECTWe respect the needs of our members, co-workers, and others, treating everyone with fairness, honesty and courtesy.

STEWARDSHIPWe recognize our fiduciary responsibility as the foundation for all decision-making.

GOAL 1

FINANCIALEnsure a financially sound retirement system.

GOAL 2

MEMBER/EMPLOYEREnhance services to members and employers.

GOAL 3

BUSINESS TRANSFORMATIONDrive operational excellence.

GOAL 4

WORKFORCE TRANSFORMATIONGrow an engaged, highly skilled and diverse workforce.

BOARD STRATEGIC GOALS

BOARD STRATEGIC GOALS | 5

STRATEGY MAP


GOAL 1: FINANCIALEnsure a financially sound retirement system.

probabilistic approaches. Actuarial staff to prepare and deliver a report to the board annually.

� Prepare a report to the Legislature on the fiscal health of the system and the ability of the CalSTRS funding plan to achieve full funding by 2046.

INITIATIVE 2 Transition to long-term asset allocation outlined in the Investment Policy and Management Plan.

Completed Activity:

9 Develop reporting framework on progress in Asset Allocation Steps as outlined in the policy. Adjust reporting based on board input. (Completed 2016–17)

Key Activities for FY 2018–19:

� Update the board regularly on current asset allocation steps compared with the long-term allocation outlined in policy.

� Begin the next Asset Liability Study with internal staff working collaboratively with the Investment Consultants.

INITIATIVE 3 Conduct research on future educational and demographic trends to inform long-term plan design.

Completed Activities:

9 Research trends in educator employment patterns and longevity. (Completed 2016–17)

9 Research implications of growing online educational offerings on educator work patterns. (Completed 2017–18)

OBJECTIVE AAchieve full funding of the Defined Benefit Program by June 30, 2046.

INITIATIVE 1Fund the system and assess the funding risk through an integrated view of assets and liabilities.


9 Determine 25th, 50th and 75th percentile for major economic and demographic assumptions. (Completed 2016–17)

9 Project liabilities and assets for each of the next 30 years using 25th, 50th and 75th percentile projections. (Completed 2016–17)

9 Research the impact of California charter schools on CalSTRS funding and member census. (Completed 2017–18)

9 Prepare and deliver an annual report to the board that reviews the funding levels and provides an assessment of risks related to the ability to achieve full funding by 2046. (Completed 2017–18)


� Continue communication, messaging and stakeholder outreach to build top-of-mind awareness of funding plan implementation.

� Use the newly established asset liability management framework to begin work on the new Asset Allocation Study.

� Continue to assess the risks related to the ability to achieve full funding by 2046 using a combination of deterministic, stochastic and

GOAL 1: FINANCIAL | 7

CALSTRS BUSINESS PLANFiscal Year 2018–19

Key Activity for FY 2018–19:

� Survey member population to collect demographics and related variables.

OBJECTIVE BLower the probability of downside risk to the CalSTRS Investment Portfolio.

INITIATIVE 1Implement risk-mitigation strategy asset class.


9 Implement internal management; for example, long-duration Treasury Portfolio. (Completed 2016–17)

9 Implement risk management and reporting. (Completed 2016–17)

9 Review infrastructure and establish portfolio management process. (Completed 2016–17)

9 Complete due diligence reviews and fund additional trend following managers, global macro managers and systematic risk premia managers. (Completed 2017–18)

9 Enhance risk management and reporting. (Completed 2017–18)

9 Study ways to expand internal management for the RMS asset class. (Completed 2017–18)


� Continue to build staff resources and the infrastructure necessary to properly manage the RMS asset class.

� Research other strategies to include in the RMS or other segments of the total fund.

� Monitor the RMS asset class to ensure it is meeting objectives and performing as designed. Periodically report to the board.

INITIATIVE 2Evaluate the CalSTRS enterprise investment risk management and reporting platform in preparation of a competitive search (RFP) for a long-term solution. (Completed December 2017)


9 Evaluate the new enterprise risk management system. (Completed 2016–17)

9 Develop internal risk report for senior investment staff. (Completed 2016–17)

9 Complete comprehensive review of risk management platforms. (Completed 2016–17)

9 Issue RFP for enterprise risk management system. (Completed 2016–17)

9 Award RFP for enterprise risk management system. (Completed 2017–18)

9 Implement enterprise risk management system. (Completed 2017–18)

OBJECTIVE CAlign CalSTRS’ investment beliefs, investment objectives and strategy implementation.

INITIATIVE 1 Facilitate board adoption of the CalSTRS Investment Beliefs in consideration of stakeholder input. (Completed 2016–17)

INITIATIVE 2Facilitate board review and refresh of the CalSTRS Risk Factors in consideration of stakeholder input. (Completed 2016–17)

INITIATIVE 3Facilitate board review and approval of the Environmental, Social and Governance and Sustainability Policy in consideration of the Investment Beliefs and updated Risk Factors. (Completed June 2018)


Completed Activity:

9 Present ESG and Sustainability Policy for board approval and adoption. (Completed 2017–18)

INITIATIVE 4Implement the Investment Policy for Mitigating Environmental, Social and Governance Risks across the investment program, including corporate governance strategies.


� Develop and execute an ESG engagement and integration outreach communication plan that includes activities to increase awareness of how and why CalSTRS invests and what CalSTRS does to engage portfolio companies on ESG risks.

� Review the ESG and Sustainability Policy along with existing processes and external partner agreements for implementation, and adjust processes as necessary, including corporate governance engagement strategies.

� Update the CalSTRS Divestment Policy to reflect divestment versus engagement philosophy.

� Develop parameters pertaining to legislation that impacts investment activity.

� Communicate to stakeholders about the value of engaging on ESG risks, the Divestment Policy and the risks associated with divestment.

� Implement the Corporate Governance Engagement Plan’s top priority: the engagement of companies that manufacture and sell firearms illegal in the State of California.

� Develop specific communications related to CalSTRS’ enhanced focus on firearms.

INITIATIVE 5Facilitate the development of a framework and policy relating to special mandates for board approval. (Completed 2016–17)

OBJECTIVE DManage costs and efficiencies and seek to influence industry best practices.

INITIATIVE 1Conduct cost project to develop a framework and reporting of all costs and fees. (Completed 2016–17)

INITIATIVE 2Expand internal management of investments.


9 Transition portion of EAFE allocation. (Completed 2016–17)

9 Amend contracts with index providers. (Completed 2016–17)

9 Monitor internal management of assets. (Completed 2016–17)

9 Evaluate and plan for next phase of transition. (Completed 2016–17)

9 Study ways to expand direct and co-investment investment activities. (Completed 2017–18)


� Continue to assess ways to expand internal management.

� Research and develop the Collaborative Business Model.

� Assess and enhance methods to track discretionary internal strategies for reporting purposes.

GOAL 1: FINANCIAL | 9

INITIATIVE 3Collect and report investment costs and fees.


9 Gather and report direct costs for the investment portfolio for calendar year 2016. (Completed 2017–18)

9 Gather data to prepare a global peer direct cost comparison for asset management. (Completed 2017–18)

9 Work with outside vendor to prepare an indirect cost report for calendar year 2016. (Completed 2017–18)

9 Implement AB 2833 reporting requirements. (Completed 2017–18)


� Gather and report direct costs for the investment portfolio for calendar year 2017.

� Gather data to prepare a global peer direct cost comparison for asset management.

� Work with outside vendor to prepare an indirect cost report for calendar year 2017.

� Present AB 2833 report for 2017–18.


GOAL 2: MEMBER/EMPLOYEREnhance services to members and employers.

OBJECTIVE AIncrease the accuracy and completeness of employer reporting.

INITIATIVE 1Conduct employer training on systemic issues identified through audits.


9 Identify issues. (Completed 2016–17)

9 Design training. (Completed 2016–17)

9 Schedule training. (Completed 2016–17)


� Continue to identify systemic audit issues.

� Conduct employer training sessions.

� Evaluate effectiveness of employer training by conducting follow-up assessments of subsequent reporting.

INITIATIVE 2Obtain acceptance and implement new data fields and value specification for employer reporting.


9 Improve or enhance the set of data fields needed for more comprehensive employer reporting. (Completed 2016–17)

9 Facilitate employer forums. (Completed 2016–17)


� Conduct stakeholder outreach.

� Analyze and initiate required regulatory or statutory activities necessary to implement the new employer reporting file structure and format.

� Initiate rulemaking process with target completion date concurrent with rollout of the Pension Solution Employer Readiness Environment.

INITIATIVE 3Enhance the quality assurance process for contributions and employer reporting.


9 Develop variance thresholds for monthly contributions by employer and test contribution levels against these thresholds. (Completed 2016–17)

9 Revise employer accrual model for contributions to reflect seasonality of creditable compensation and incorporate current year employment trends. (Completed 2017–18)


� Evaluate monthly contribution variances by employer at four threshold levels (20 percent, 15 percent, 10 percent and 5 percent); investigate and analyze outliers to identify causes and minimize errors.

� Conduct employer outreach to provide training and reporting support.

� Engage with employers on the specifics of potential excess sick leave legislation.

� Develop methodologies to detect signs of financial stress for charter schools.

OBJECTIVE BImprove retirement readiness of CalSTRS’ members.

INITIATIVE 1Expand suite of member education products and services, including financial literacy information.


9 Develop additional financial education products and services. (Completed 2016–17)

9 Enhance existing financial education products and services. (Completed 2016–17)

GOAL 2: MEMBER/EMPLOYER | 11

9 Deploy Member Service Center staff to promote regional member engagement and financial awareness. (Completed 2017–18)


� Deliver education products and services to locations outside of MSC service areas through outreach, and leverage technology to reach a greater member audience.

INITIATIVE 2Build a framework for onboarding new members. (Completed June 2018)


9 Establish relationships with key stakeholder groups and credential programs and begin educator support networks to facilitate member onboarding activities. (Completed 2017–18)

9 Target new educators and younger, early career members with materials focused on retirement readiness that integrate age-appropriate messaging and marketing tactics. (Completed 2017–18)

9 Develop a focused, targeted CalSTRS onboarding video for districts to show as part of new employee orientation. (Completed 2017–18)

9 Design a marketing strategy to encourage use of the video in staff orientations or on intranet sites. (Completed 2017–18)

INITIATIVE 3Initiate the framework with select employers for onboarding new members on a pilot basis.

Key Activities for FY 2018–19

� Brand materials, resources and tools provided to members.

� Explore gamification, video messages and a website portal on CalSTRS.com with targeted information to engage new members.

INITIATIVE 4Enhance marketing for Pension2 products and services, including the newly redesigned 403bCompare website.


9 Launch the redesigned 403bCompare website. (Completed 2016–17)

9 Continue to develop marketing materials and outreach activities for Pension2 products and services. (Completed 2017–18)

9 Contact school district employers to place 403bCompare.com “badge” on their intranet sites for staff. (Completed 2017–18)


� Refresh Pension2 marketing campaign.


GOAL 3: BUSINESS TRANSFORMATIONDrive operational excellence.

� Begin planning for user acceptance testing.

� Continue conversion activities.

b. Recalibrating the project

� Re-baseline the project schedule and budget.

INITIATIVE 2Align organizational expectations and structure to new business processes and technologies.


9 Formalize a change management plan. (Completed 2016–17)

9 Formalize a communication plan. (Completed 2016–17)

9 Conduct visioning sessions to map key business processes to new system functionality. (Completed 2017–18)


� Develop and perform change readiness training and coaching in alignment with the change management plan.

� Conduct change awareness activities for impacted business areas on key project deliverables in alignment with the communication plan.

� Conduct targeted change readiness assessments of impacted business areas to gauge employee readiness.

� Support organizational redesign efforts with coordinated communications and timely presentations.

� Execute a soft launch implementation strategy that includes training and outreach to employers.

OBJECTIVE AImplement and integrate a new pension administration system for CalSTRS.

INITIATIVE 1Implement Pension Solution.


9 Complete system build and unit test activities for Pension Solution Functional Rollout 1: Enrollment and Contributions. (Completed 2016–17)

9 Plan and prepare for user acceptance testing for Pension Solution Functional Rollout 1. (Completed 2016–17)

9 Plan and prepare system implementation activities for the deployment of Pension Solution Functional Rollout 1. (Completed 2016–17)

a. Functional Rollout 1

9 Complete contractor acceptance testing for Pension Solution Functional Rollout 1. This includes system test, system integration test, performance test and parallel system test. (Completed 2017–18)

b. Recalibrating the project

9 Conduct Functional Rollout 2 fit-gap exercise. (Completed 2017–18)

9 Fine-tune improvement ideas. (Completed 2017–18)

9 Develop resources and processes. (Completed 2017–18)


a. Implement Functional Rollout 1 soft launch, also known as the Employer Readiness Environment

� Complete design.

� Plan for and begin contractor acceptance testing with the new functionality associated with the Employer Readiness Environment.

GOAL 3: BUSINESS TRANSFORMATION | 13

INITIATIVE 3Complete data preparation.


9 Implement basic data issue fixes for Pension Solution Functional Rollout 1: Enrollment and Contributions. (Completed 2016–17)

9 Implement policy and business decision documents, such as Archiving Data and Updated Member Calculated Contributions. (Completed 2017–18)


� Begin additional basic data issue fixes for upcoming Pension Solution rollouts.

� Ensure employer reporting fits within member account lifecycles and correct member accounts with incorrect balances (terminations out of balance) prior to conversion.

INITIATIVE 4Augment cost information on maintaining the current pension administration system. (Completed June 2018)


9 Determine baseline cost of administration activities, including technology support for comparison to post-Pension Solution implementation costs. (Completed 2016–17)

9 Establish baseline activity rates to assist in cost modeling. (Completed 2016–17)

9 Complete Pension Solution technology platform transition cost model. (Completed 2016–17)

9 Develop 2017–18 Cost Allocation Plan documenting CalSTRS’ cost allocation framework. (Completed 2017–18)

9 Develop cost-modeling capability based on cost drivers to predict the pension administration cost structure under the new Pension Solution environment. (Completed 2017–18)

9 Explore automation of existing manual cost allocation process. (Completed 2017–18)

9 Complete and automate the updated Pension Program Allocation methodology. (Completed 2017–18)

INITIATIVE 5Integrate the new pension administration system with current accounting system.


� Identify new and obsolete requirements for changes in the accounting system as a result of the fit-gap exercise and improvement ideas.

� Evaluate changes in processes.

OBJECTIVE BContinuously strengthen processes and resources to secure the confidentiality and integrity of member data and information.

INITIATIVE 1Complete cybersecurity assessment.


9 Complete Phase I third-party cybersecurity assessment. (Completed 2016–17)

9 Remediate Phase I high-risk, low-effort findings. (Completed 2016–17)

9 Begin assessment for Phase II. (Completed 2016–17)

9 Complete Phase II third-party cybersecurity assessment. (Completed 2017–18)

9 Remediate Phase II high-risk, low-effort findings. (Completed 2017–18)


� Complete Phase III third-party cybersecurity assessment.

� Remediate Phase III high-risk, low-effort findings.

� Provide semiannual updates to the board.


OBJECTIVE CContinuously improve the quality, cost effectiveness and efficiency of CalSTRS’ business functions.

INITIATIVE 1Identify appropriate opportunities to consolidate CalSTRS’ administrative authority to better serve our members.


9 Continue to seek approval of bills sponsored by CalSTRS. (Completed 2016–17)

9 Identify areas where current legal constraints hinder business operations. (Completed 2016–17)

a. Continuous appropriation

9 Identify operating budget components with potential for inclusion in the continuous appropriation and select approach. (Completed 2016–17)

b. Investment procurement

9 Review the CalSTRS RFP process for all investment-related services and identify and implement areas of improvement to enhance efficiency. (Completed 2016–17)

9 Create a working group of internal stakeholders to evaluate existing RFP process for investment-related services. (Completed 2016–17)

9 Develop an action plan to improve efficiencies in the RFP process for all investment-related services. (Completed 2017–18)

9 Develop multiyear budget planning process for Investment Support Appropriation budget changes. (Completed 2017–18)


c. Investment activities

� Implement the action plan to improve efficiencies in the RFP process for all investment-related services.

� Implement multiyear budget planning process for Investment Support Appropriation budget changes.

� Identify opportunities to improve processes related to business functions between the Investments Branch and other branches within the organization.

� Sponsor legislation to promote administrative efficiencies for the system.

INITIATIVE 2Improve efficiency of IT functions.


9 Develop an IT strategy for advancing in process and procedures maturity. (Completed 2016–17)

9 Implement enhanced risk identification and mitigation plans. (Completed 2016–17)

9 Determine viability of cloud solutions for SaaS (software as a service) and IaaS (infrastructure as a service). (Completed 2017–18)

9 Research and implement enhanced automated application and server monitoring tools and processes for proactive fault detection. (Completed 2017–18)


� Implement new service desk tool and associated functions to enhance self-service, information management, and visibility of historical information across organization.

� Implement proactive IT asset management processes and tool for hardware and software inventory, maintenance and refresh.

� Implement IT vendor pools to streamline the contract process to bring on needed IT resources.

� Establish quarterly meeting with business stakeholders.


� Upgrade personal computers in the enterprise to latest Microsoft Windows operating system and Office Suite.

� Improve Technology Services’ system testing capabilities through the acquisition and implementation of testing automation tools and processes.

INITIATIVE 3Complete long-term facility planning.


9 Develop strategies for each branch using the new configuration options. (Completed 2016–17)

9 Identify long-term solutions post-2019. (Completed 2016–17)

9 Complete furniture reconfiguration for all business areas. (Completed 2017–18)

9 Identify and implement strategies to automate and streamline space management in existing facilities. (Completed 2017–18)

9 Secure a construction manager to oversee possible headquarters expansion and collaborate on design concept and design documents as a potential alternative space solution. (Completed 2017–18)


� Research and identify alternative facility procurement strategies to accommodate interim space needs.

� Secure interim space as part of CalSTRS’ short-term leasing alternatives, if needed.

� Finalize design documents and establish “not to exceed” budget for the expansion alternative and finalize financial analysis for the long-term leasing and acquisition alternatives.

� Present long-term facilities alternatives to the board in September 2018.

� Ensure full compliance with California’s workplace seating allocation standard.

� Continue to develop messaging related to the need for additional headquarters space and the process for analyzing alternatives. Continue to communicate to members, legislators and control agencies.

INITIATIVE 4Develop data mart capabilities for business intelligence.


� Identify opportunities for development of data marts for business intelligence process and activities, and document business requirements.

� Demonstrate and validate business value through proof of concept.

OBJECTIVE DEnsure the sustainability of critical business processes and systems through the oversight of risk and enterprise compliance.

INITIATIVE 1Implement enterprisewide risk management training, residual risk calculations and program-level reporting framework. (Completed June 2018)


9 Complete the Enterprise Risk Management Framework Project. (Completed 2016–17)

9 Conduct annual training. (Completed 2016–17)

9 Develop formula for residual risk calculations and apply to enterprise and program level risks. (Completed 2016–17)

9 Establish risk champions. (Completed 2016–17)

9 Implement remaining recommendations from the ERM Framework Project. (Completed 2017–18)

9 Develop and implement additional risk management training components. (Completed 2017–18)

9 Develop and establish reporting on inherent and residual risk and key risk indicators. (Completed 2017–18)


INITIATIVE 2Align business impact analysis and disaster recovery solutions.


9 Develop RFP to procure the services of a consultant to perform a gap analysis. (Completed 2016–17)

9 Recommend and seek approval for a three-year mitigation strategy. (Completed 2016–17)

9 Implement Year 1 (near-term) of the mitigation strategy. (Completed 2017–18)


� Procure vendor to implement multi-modal (for example, co-location data centers offering managed services, cloud hosting and cloud SaaS) data center/disaster recovery solution meeting CalSTRS’ needs.

INITIATIVE 3Complete compliance assessment and program roadmap. (Completed November 2017)


9 Finalize compliance program implementation roadmap. (Completed 2016–17)

9 Revise and update Phase II implementation strategies and roadmap. (Completed 2017–18)

INITIATIVE 4Implement compliance program roadmap.


9 Secure Audits and Risk Management Committee approval of the compliance program implementation roadmap and program oversight strategy. (Completed 2016–17)

9 Identify and acquire funding for new program implementation. (Completed 2016–17)


� Continue implementation of Phase II strategies and roadmap.

� Recruit for positions.

� Develop and implement compliance program policies, procedures, standards and processes.


GOAL 4: WORKFORCE TRANSFORMATIONGrow an engaged, highly skilled and diverse workforce.


� Pilot student internship program for identified branches.

� Develop a Talent Acquisition team to provide proactive outreach consultations to hiring managers.

� Use social media and online job boards to advertise vacancies and encourage CalSTRS leaders to share vacancies on social media.

� Enhance exposure to and increase recognition of the CalSTRS brand to expand candidate pools.

� Develop college partnerships.

� Develop a talent tracking system.

� Pilot standardized branch-specific hiring processes.

INITIATIVE 3Research automation for Human Resources.


9 Complete discovery phase. (Completed 2017–18)

9 Conduct business process improvement and re-engineering. (Completed 2017–18)


� Procure and implement human capital management time and attendance and core HR technology solutions.

� Continue implementation and configuration of human capital management components.

OBJECTIVE ABroaden recruitment and hiring practices to employ qualified individuals at CalSTRS to support our business objectives.

INITIATIVE 1Partner with the California Government Operations Agency and CalHR on their Civil Service Improvement efforts.

Completed Activity:

9 Influence classification studies at the state level. (Completed 2016–17)


� Support leading-edge best practices in human resource selection and development efforts.

� Influence and participate in classification studies and consolidation efforts at the state level.

� Implement recommendations from the statewide classification consolidation efforts.

INITIATIVE 2Formalize and implement a talent acquisition strategy plan.


9 Expand outreach activities to Southern California. (Completed 2016–17)

9 Incorporate lessons learned from the Investments Branch’s student internship pilot to expand to other areas. (Completed 2016–17)

9 Enhance the CalSTRS employer brand. (Completed 2016–17)

9 Create branch-specific recruitment videos. (Completed 2017–18)


OBJECTIVE BAdvance engagement strategies that retain and develop employees to meet the future business needs of CalSTRS.

INITIATIVE 1Refresh and implement the Workforce Plan.


9 Develop mission critical position cycle. (Completed 2016–17)

9 Research and incorporate current workforce best practices. (Completed 2016–17)


� Implement recommendations from the Workforce Plan.

INITIATIVE 2Roll out enterprisewide diversity and inclusion education.


9 Develop branding. (Completed 2016–17)

9 Develop workshops. (Completed 2016–17)

9 Pilot and begin to roll out workshops. (Completed 2016–17)


� Deliver diversity and inclusion workshops to all employees.

� Transition diversity and inclusion training as an onboarding activity.

� Form the Diversity and Inclusion Advisory Council to steer future diversity and inclusion efforts.

INITIATIVE 3Roll out lead person training. (Completed 2016–17)

INITIATIVE 4Expand wellness program offerings. (Completed June 2018)


9 Research best practices around wellness in the workplace. (Completed 2016–17)

9 Acquire understanding of statewide wellness efforts. (Completed 2016–17)

9 Research wellness programs and platforms. (Completed 2017–18)

9 Research and implement wellness solutions for member service centers. (Completed 2017–18)

INITIATIVE 5Research and implement key drivers of employee engagement at CalSTRS.


9 Analyze key drivers. (Completed 2016–17)

9 Research literature-based and best practice-supported strategies to support and sustain engagement. (Completed 2016–17)

9 Conduct the 2018 Employee Survey. (Completed 2017–18)

9 Research video and webinar connectivity tools to identify potential solutions to increase internal networking, collaboration, engagement and knowledge sharing within CalSTRS. (Completed 2017–18)

9 Implement regular electronic updates to enhance information sharing with employees and their awareness of enterprisewide topics and events. Create ongoing outreach plan and distribution timeline/channels. (Completed 2017–18)


� Analyze, prioritize and develop a strategy map to support recommendations from the 2016 Communication Key Driver Report.

GOAL 4: WORKFORCE TRANSFORMATION | 19

� Explore the redesign of the CalSTRS Central intranet site and develop a plan for execution.

� Analyze key drivers of employee engagement from the 2018 Employee Survey.

� Review annual evaluation process and communication competencies measurement for leadership.

OBJECTIVE CEnhance organizational performance by strengthening strategies for leadership succession.

INITIATIVE 1Develop transition plans for senior leadership.


9 Develop a baseline for transition time of senior leadership positions. (Completed 2016–17)

9 Interview or survey recent leaders promoted into senior leadership roles to assess the plus/delta in transitions. (Completed 2016–17)

9 Establish consistent format and action items for future transitions. (Completed 2016–17)

9 Prioritize senior leaders at highest risk of retirement. (Completed 2017–18)

9 Identify targeted audience for executing transition plans. Create strategy, mapping and planning process for execution. (Completed 2017–18)


� Continue developing transition plans for senior leadership.

� Continue discussion with the board on succession planning for the CIO and CEO positions.

INITIATIVE 2Implement leadership development strategies.


a. Master Series Development Program

9 Market and begin application process. (Completed 2016–17)

9 Onboard and launch program. (Completed 2016–17)

9 Launch first half of cohort program. (Completed 2016–17)

9 Complete and evaluate program. (Completed 2017–18)

b. ASPIRE—Investment Leadership Development Program

9 Research and design development program. (Completed 2016–17)

9 Market and begin application process. (Completed 2017–18)

9 Launch first half of the cohort program. (Completed 2017–18)


� Complete and evaluate the ASPIRE—Investment Leadership Development Program.

INITIATIVE 3Research and plan effort for mentorship.


9 Research best practices on mentorship in organizations. (Completed 2016–17)

9 Collect mentorship materials from other agencies currently managing a mentor program. (Completed 2016–17)

9 Design and implement approved recommendations for mentorship strategy. (Completed 2017–18)

9 Roll out pilot effort for mentorship. (Completed 2017–18)



� Mature the mentorship effort and incorporate lessons learned from pilot groups or business areas.

� Continue to expand pilot of mentorship.

� Implement strategy to roll out the mentorship program throughout CalSTRS.

INITIATIVE 4Refresh and implement the Leadership Development and Succession Plan.


9 Review recommendations from the original plan and identify accomplishments. (Completed 2016–17)

9 Align document with newly established CalHR model. (Completed 2016–17)

9 Incorporate mission critical, business impact analysis, and enterprisewide risk content. (Completed 2016–17)

9 Research and incorporate current succession and leadership development best practices. (Completed 2016–17)


� Implement recommendations from the refreshed Leadership Development and Succession Plan.

INITIATIVE 5Expand leadership onboarding experience.


9 Enhance online resources for new leader onboarding efforts. (Completed 2016–17)

9 Coordinate networking opportunities for new leaders. (Completed 2016–17)

9 Research and identify business area-focused leadership onboarding activities. (Completed 2017–18)


� Implement business area leadership onboarding.

� Publish leadership-specific supplement to the CalSTRS Onboarding Guide.

GOAL 4: WORKFORCE TRANSFORMATION | 21

Salaries 1

Data Processing and Storage 4

40.56% | $112,604,910

3.55% | $9,862,168

1 Figure includes salaries for authorized positions ($93.291M), incentives ($7.0M), overtime ($0.314M), and blanket positions ($12.0M).

2 Figure includes executive expense account, employee appreciation, printing, communications, postage, insurance, travel in/out state, training, 21st Century, indirect cost, equipment over $5K, and special items of expense.

3 Figure includes significant information technology consulting resources for the Pension Solution project. 4 Figure includes OTECH, data processing and storage. 5 Figure includes an augmentation of $15,423,020 pursuant to the multiyear budget change proposal approved by the board in November 2017.

Of this amount, $3,400,000 was allocated in FY 2018-19 and the remaining authority will be deployed through 2022-23. Pursuant to the assault weapons engagement strategy approved by the board in May 2018, an additional Corporate Governance position was created resulting in a $160,000 augmentation of the Operating Budget.

$277,641,192

Operating Budget

$591,075,590CalSTRS Budget

$313,434,398

Estimated External Investment Management Expenses

Facilities Operations

3.17% | $8,802,525

Central Administrative Services (Pro Rata)

4.23% | $11,756,976

General Expense 2

Consulting and Professional Services 3

7.78% | $21,598,877

19.88% | $55,200,382

$277,641,192 Operating Budget 5

Benefits

20.82% | $57,815,354

BUDGET AND RESOURCES

OVERVIEW FY 2018–19 CALSTRS BUDGET


Audit Services

2.54% | 34.0

Public Affairs

2.54% | 34.0

Executive Office

2.84% | 38.0

General Counsel 2

3.96% | 53.0

Financial Services

8.03% | 107.5

Administrative Services

10.05% | 134.5

Technology Services

16.74% | 224.0

Investments 3

16.81% | 225.0

Benefits and Services

36.50% | 488.5

1,338.5 Teachers’ Retirement Board

Authorized Positions 1

FY 2018–19 AUTHORIZED POSITIONS BY BRANCH

1 Figure includes blanket positions. 2 Figure includes an augmentation of two positions pursuant to the multiyear budget change proposal approved by the board in November 2017. Of these

positions, one was allocated in 2018-19 and the remaining position will be deployed in 2020-21.

3 Figure includes an augmentation of 55 positions pursuant to the multiyear budget change proposal approved by the board in November 2017. Of these positions, 12 were allocated in FY 2018-19 and the remaining positions will be deployed through 2022-23. Pursuant to the assault weapons engagement strategy approved by the board in May 2018, an additional Corporate Governance position was created and increases Investments Branch total positions to 225.

BUDGET AND RESOURCES | 23

P.O. Box 15275Sacramento, CA 95851-0275800-228-5453CalSTRS.com

california state teachers’ retirement system …we model best practices in our industry and...

Documents