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Looking Back at CalPERS Pension Spending During the COVID-19 Pandemic

At CalPERS, we are proud to have a positive impact on the California economy. In cities large and small, our pension payments to members are stimulating local economies all over the state. The new 2020-21 Economic Impacts Report details how pension spending during the COVID-19 pandemic continued to play an important role in California’s economy.

Pension Benefit - Retires and beneficiaries receive pension checks. Direct Impact - Pension checks are spent to purchase local goods and services. Indirect Impact - Local businesses receive revenue, purchase supplies, and support jobs. Induced Impact - Employees spend additional income to further support local businesses and jobs.

Even though the COVID-19 pandemic led to major economic disruptions in California in 2020, the estimated statewide economic activity generated by pension payments only slightly decreased to $27.7 billion from our 2019 analysis of $28 billion.

While some regions and industries contracted significantly, the overall impact supported over 144,000 jobs and generated $1.7 billion in sales and property tax revenue.

Infographic stating that the $22.4 billion paid in pension payments in California (1) supported 144,463 jobs, (2) generated $1.7 billion in tax revenue for local industries, and (3) supported local community growth, with the biggest impact in the smaller ones. The end result was $27.7 billion in economic activity generated by CalPERS pension payments.

In smaller communities where retirees and beneficiaries consume goods and services, the impact of pension payments is largest. While Los Angeles and Santa Clara counties have large gross regional products (GRPs), some counties with smaller GRPs, such as Riverside and Amador, have a significantly greater weighted economic impact due to the size of the population and pension payments.

Overall, this money provides a steady stream of income for California residents, taxpayers, and local governments, regardless of the economic conditions.

Read the Economic Impacts of CalPERS Pensions in California report that details how pension payments impact the California economy.