CalPERS-CalSTRS Retirees Boost Central Coast Region Economy by $447 Million
SACRAMENTO, CA – Retirees of the California Public Employees’ Retirement System (CalPERS) and California State Teachers’ Retirement System (CalSTRS) pump more than $447 million per year into the Central Coast regional economy, according to a recent economic study.
The study by the Applied Research Center of Sacramento State University found that CalPERS and CalSTRS pay $334 million per year in pension benefits to more than 29,000 retirees living in the Central Coast region. The region spans Monterey, San Luis Obispo and Santa Barbara counties.
When those retirees spend their retirement income, they produce an additional $113 million of economic activity, commonly called a “ripple effect,” for a total impact of almost $447 million on the regional economy.
“This is powerful evidence of the positive economic impact of CalPERS and CalSTRS pension benefits,” said CalPERS Chief Executive Officer Fred Buenrostro. “The study demonstrates that CalPERS and CalSTRS retirees provide a tremendous economic boost to the Central Coast area.”
The $447 million impact of CalPERS and CalSTRS pension payments produce $200 million of value added to the Central Coast regional economy, creating 2,950 jobs with a payroll of $89 million per year.
CalPERS and CalSTRS retirement benefits and related economic activity also generate more than $27 million in state and local tax revenues for the region.
“We should not take for granted the beneficial economic impact of CalSTRS and CalPERS retirees,” CalSTRS Chief Executive Officer Jack Ehnes said. “When retirees spend their retirement income, it fuels the economy and produces economic benefits for all Californians.”
The economic impact data come from a larger study that found retirement benefits paid by CalPERS and CalSTRS generate $21 billion of economic activity per year in the state.
The study was conducted by Dr. Robert Fountain, professor emeritus and director of the California State University, Sacramento, Applied Research Center, and Dr. Robert Waste, professor of public policy and administration at CSUS. In their analysis, the researchers used the economic impact model called IMPLAN (Impact Analysis for Planning), which was developed by the federal government and is widely used and widely accepted for economic impact studies. In addition to calculating the statewide impact, the study also breaks down the economic impacts by region and by county.
CalSTRS is the second largest public pension fund in the U.S., with assets of approximately $171 billion. It provides retirement benefits to nearly 800,000 active and retired California public educators and their families.
CalPERS, with more than $245 billion in assets, is the largest public pension fund in the U.S. It administers retirement plans covering approximately 1.5 million active and retired California public employees and their families on behalf of more than 2,500 State, school, and local government employers statewide.