Published: May 1, 2014
SCERA members, active employees and retirees, are taxpayers too. As taxpayers, they should know that although SCERA receives less than 4% of the total County budget, that portion of their tax dollars is benefiting the Sonoma County economy in a big way.
Each and every month SCERA pays out benefits to retired members and their beneficiaries. Benefit payments are made whether the stock market is up or down; they are made in good times and bad. When other sectors of the economy shrink, SCERA benefit payments do not. SCERA profits the Sonoma County economy by providing economic stimulus even during tough economic times.
More than 75% of SCERA retirement benefits are paid to Sonoma County recipients. Last month 2,942 Sonoma County retirement recipients received an average of about $3,000 each. Sonoma County benefit recipients receive about twice as much in retirement benefits as public employers contribute into SCERA. This is possible because employees make substantial contributions also and investment earnings pay for the bulk of the retirement benefits.
Moreover, these retirement benefit dollars circulate in the local economy as benefit recipients spend for their basic needs. The National Institute on Retirement Security (NIRS) has calculated that each dollar of pension benefit paid leads to $2.36 in direct, indirect and induced economic impact. That’s a $20 million boost to the economy each month from Sonoma County recipients; almost a quarter billion dollars a year.
That’s a healthy return on the taxpayers’ investment.