Survey examines spending by CalPERS, CalSTRS retirees

Sacramento Bee 4/18/07

By Gilbert Chan

California's two giant public pension funds pack a powerful economic punch, giving a $21 billion boost to the state economy every year, according to a new study.

Together, spending by 675,000 retired teachers and state and local workers, helps create 139,000 new jobs annually, representing a payroll of $4.8 billion, said Fred Buenrostro, chief executive officer of the $241 billion California Public Employees' Retirement System, the nation's largest public pension fund.

Buenrostro on Wednesday gave the CalPERS governing board highlights of the first-ever economic impact survey looking at CalPERS and California State Teachers' Retirement System, the nation's No. 2 public fund with nearly $160 billion in assets.

The study, scheduled for public release Thursday, was prepared by the Applied Research Center at California State University, Sacramento. It analyzed the economic ripple of the more than $13.7 billlion in pension benefits paid to the funds' retirees every year and spells out the impact for each county in the state. The CalSTRS county breakdown is still being compiled.

In Sacramento County, for example, the study estimates CalPERS generates $2.2 billion in economic activity, 7,500 jobs a year and $74 million in tax revenue a year.

"We shouldn't take retirees for granted," Buenrostro said. "Literally if we didn't have CalPERS and CalSTRS, the state and local governments would be deprived of billions of dollars."