LACERA Pension Economic Impact Study

Project Overview

Where Pension Dollars Go When Retirees Spend Them

The Los Angeles County Employees Retirement Association (LACERA) is one of the largest public pension systems in the United States, administering retirement benefits for hundreds of thousands of current and retired public employees. Each year, LACERA distributes billions of dollars in benefit payments to retirees, the overwhelming majority of whom remain in California and spend their pension income locally.

This study quantified the full economic, fiscal, and social impact of LACERA's operations and benefit payments, with particular emphasis on how the impact is distributed across California's legislative geography. The analysis was mapped to more than 50 California legislative districts, giving LACERA, its members, and the state's elected officials a granular view of where pension spending lands.

Methodology

The study modeled four distinct categories of LACERA-driven economic activity:

1. Retiree benefit payments. Pension distributions flowing to LACERA members in retirement, modeled by retiree residence to capture where the money is actually spent.
2. Employer contributions. Employer pension contributions from Los Angeles County and participating agencies — money that flows through LACERA's operations and into investment management, administrative spending, and the broader economy.
3. Investment management activity. Spending on advisory services, custodial banking, and other operations supporting LACERA's investment portfolio.
4. Administrative operations. Direct LACERA employment, payroll, and procurement spending.

Each stream was modeled in IMPLAN with California-specific multipliers to capture indirect supply-chain effects and induced household-spending effects. Results were then attributed to legislative districts based on retiree residence patterns and employer locations.

Why District-Level Reporting Matters

Public pension systems often face political headwinds during budget cycles. A single statewide impact figure is useful, but a state senator or assembly member is far more attentive when they can see exactly how many of their constituents receive LACERA pensions and how many local jobs depend on that spending. By delivering district-level results, the study transforms abstract numbers into concrete political stakes that elected officials can communicate to their constituents.

The study also documented social impacts: retirement security, financial stability for older Californians, and the role of public pensions in keeping seniors in their communities rather than displacing them. The full report is available on the LACERA website.

View LACERA Report (PDF) → Discuss Your Project →