PERA is an economic generator

Over $3.6 billion is paid out to PERA retirees annually and 87 percent of PERA retirees stay in Colorado and spend their retirement income in every county in Colorado, providing a steady stream of income to businesses in Colorado.

Retirees spend those benefit payments in every community in our state.  These payments are a critical source of reliable, predictable income and proved an “automatic stabilizing effect” on State and local economies, especially in economic downturns as these monies provide important stimulus.  These steady monthly benefit payments are especially vital to small communities.  Households with stable incomes can be counted on to spend on basic needs and other purchases as well as pay taxes and fees generating revenue for State and local governments.

The impact of the PERA payments reaches well beyond those who receive the initial payments because they spend money in their local grocery stores, restaurants and gas stations.  This creates the “multiplier” effect.  Here’s how it works:

  • PERA makes monthly payments to recipients.
  • PERA recipients spend the monthly monies on household needs such as food, gasoline and utilities and pay taxes and fees.
  • Businesses and/or governments providing those needs use their existing inventory or purchase new inventory and may also be required to hire labor to sell or produce their products or provide their services.
  • Business owners, as well as their employees, get income from these purchases and they too then go out and buy goods and services
  • Which, in turn, generates more demand for local goods and services—and the cycle repeats itself.

So, you see when a household receives PERA payments, it represents an infusion of income into the local economy that creates a chain of economic activities whose total impact is greater than the initial benefit payments.  That is, these payments have substantial “multiplier” effects where one recipient’s spending becomes someone else’s income.  In all, spending by PERA retirees generates 23,000 Colorado jobs and $230 million in Colorado state and local tax revenue.

PERA has a large economic footprint on the State and local economies.  These payments are a critical source of reliable, predictable income and provide and “automatic stabilizing effect” on State, regional and local economies, especially in economic downturns as these monies provide important stimulus to local and State market activity.

For more information on the impact these payments make click here.

To read PERA’s entire economic study click here.

To see how these payments break out by county click here.