Republicans and pension busters have been whacking CalPERS like a piñata in recent years. But here's something they don't like to talk about – CalPERS is a huge job creator in California, and weakening it would be a major drag on the state's economy.
According to a March 2014 report, CalPERS provides retirement benefits to over 450,000 retirees and invests $20.7 billion throughout the state, serving as an economic multiplier as the money ripples through the state’s economy. The total economic revenue generated by CalPERS benefits was nearly $30.4 billion, or 1.6 percent of California’s Gross Regional Product.
The report also found that each dollar of benefit payments issued by CalPERS created $2.39 worth of economic activity statewide. State and local governments see a return of $10.85 worth of economic activity for each dollar they contribute to CalPERS benefit payments.
CalPERS benefit recipients generate business revenue in many different industry sectors, creating over 113,000 jobs in California. Over $1 billion supported California’s recovering real estate sector. Another $1.4 billion in business revenues went to health care services supporting physician, dentist and health care offices and private hospital sectors.
As of June 2012, investments in California accounted for approximately 8.9 percent, or $20.7 billion, of the total investment portfolio and supported approximately 1.5 million jobs.
"In addition to the positive financial impact our retirees have on supporting the state's economy, CalPERS investments help strengthen California businesses," noted Ann Boynton, CalPERS Deputy Executive Officer of Benefit Programs Policy & Planning.
In addition to providing the ancillary benefit of job creation, CalPERS investments provide social benefits by providing capital to areas that have limited access to private equity. In fact, more than 70% of CalPERS private equity investments are in areas with high demographics of racial and ethnic minorities.