Trustees of the California State Teachers' Retirement System on Thursday called for a new review of its projected $23.1 billion pension fund shortfall.

Buoyed by a rebounding stock market, trustees want to determine if recent investment gains have narrowed the gap and would allow them to raise less than the additional $1 billion that is needed to help wipe out the shortfall. The new study was authorized after trustees approved a biennial actuarial report that blamed stock market losses and subpar investment returns from 2001 to 2003 for putting the fund in the hole.

Other pension plans across the country face similar funding shortfalls.

Consulting firm Milliman said CalSTRS - as of June 30, 2003 - was producing only 82 percent of the income necessary to pay future retirement benefits.

The shortfall doesn't affect retirement benefits for CalSTRS' 735,000 members because their pension is guaranteed by law.

But it could mean teachers, school districts and the state may be required to increase their contributions in the future.

"It's a situation that has to be dealt with," Jack Ehnes, CalSTRS chief executive officer, told trustees.

Ehnes said CalSTRS, the nation's third largest public pension fund with $116 billion in assets, can't count on generating steady, double-digit returns necessary to bridge the gap.

Officials estimate annual increases would have to be in the 20 percent range for several years - a rate of return the fund never achieved even during the height of the unprecedented bull market during the 1990s.

"Investing our way out of it is not the solution," Ehnes said.

In the coming months, CalSTRS will talk with teachers, school districts and lawmakers to develop a plan.

The Legislature must approve any increase in pension fund contributions.

"It would be easy to say we need more contributions and people go off thinking where's that going to come from," Ehnes said. "We haven't gone through the different scenarios."