Every month retired public employees across the state receive their benefit payments from Colorado PERA. Retirees then spend their income in their communities, supporting local economies and jobs and providing an important stabilizing economic force.

In 2023, PERA paid $4.56 billion in benefits to 114,432 retirees living in Colorado, resulting in $7.1 billion in total economic output and supporting 28,525 jobs in the state, according to a newly released report from Boulder-based Pacey Nehls Economic Consulting. The Economic and Fiscal Impacts report also found PERA retirees paid nearly $382 million in state and local taxes on those benefits, supporting schools, roads, and other vital services.

The multiplier effect

When retirees spend their pension income, it sets off a multiplier effect as businesses then spend money to stock more inventory and hire staff, employees of those businesses spend their own income, and governments collect taxes on all that spending. The result is every dollar in PERA benefits grows as it cascades through the economy.

This cycle of spending illustrates the economic measure of “value-added,” which counts only the additional production of goods and services resulting from PERA distributions rather than total output.

Pacey Nehls estimates a PERA retiree’s economic output multiplier at 1.56, meaning an extra 56 cents are generated in the economy for every dollar a retiree spends. In total, PERA retiree spending resulted in $3.39 billion in added economic value statewide last year.

The stabilizing effect

The consistent flow of billions of dollars in PERA retirement benefits into communities across the state every year helps add stability to the state and local economies. This stabilizing effect is especially strong in some of Colorado’s rural areas, where public employees make up a larger portion of county payroll and their retirement benefits are higher per capita.

For example, the Denver metro area has the most overall PERA distributions in Colorado at more than $2.3 billion last year, which equates to $708 per person. Meanwhile, the Pueblo-Southern Mountain region’s $382 million in PERA benefits comes out to $1,555 per person.

The stabilizing effect of PERA benefits was especially helpful during the COVID-19 pandemic. When businesses, schools, governments, and other entities shut down or greatly reduced staff due to the health emergency, PERA continued to pay benefits to retirees across the state, providing consistent, reliable money to local economies when other economic activity was lower than usual.

For more information, including detailed breakdowns by region and county, download the Economic and Fiscal Impacts report here.