Due to a surprisingly high return of 27%, the California State Teachers’ Retirement System (CalSTRS) looks on track to hit full funding in 2041, according to an article in Chief Investment Officer. That’s five years ahead of the 2046 prediction made last year, and it’s also anticipated that CalSTRS will hit 80% funding in 2024—10 years ahead of schedule. The announcement was made during a recent board meeting.

It’s hard to know what the pension’s exact funded ratio is, because CalSTRS hasn’t released its 2021 actuarial valuation report yet. In 2020, the exact funded ratio was 67%. CalSTRS’s funding issues first started in 2001 after the dot-com bubble burst and investment returns were less than expected—a situation that only worsened 7 years later during the 2008 financial crisis. But a plan in 2014 enacted by the California legislature helped to increase contributions and put the fund back on track, the article details.

Employers accounted for about 70% of CalSTRS’ unfunded liability in 2020, with the state responsible for the other 30%. The expectation is that the state’s share will be eliminated in 2023 and turn into a surplus. But employer liability will likely go up over the next few years, the article maintains, because their share is tied to the rate of return.

While the board is optimistic about the fund’s future, they also warned that while 2021 brought them great returns, a year of negative returns could also have a lasting effect on future projections. “I don’t think we’ll ever be able to…tell you there’s 100% certainty we’ll be able to achieve full funding just because of the inherent investment risk that we have in our portfolio,” David Lamoureux, the CalSTRS Deputy System Actuary, said at the meeting.