California state employee retirements dropped in 2023, new CalPERS data show

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Fewer state workers retired in 2023 than in any of the previous five years, new data show.

Preliminary numbers from the California Public Employees’ Retirement System show that about 9,900 state workers retired in 2023, about 1,600 fewer than in 2022. That’s a 14% decline year-over-year.

Last year’s retirement numbers are lower than usual even when compared to pre-pandemic years. About 10,900 people retired in 2018, which is just over 9% more than last year’s retiree total.

The dip in retirements marks a shift from the surge of separations that took place during the pandemic years. State employee retirements peaked in 2020, when 12,500 state workers applied for retirement status with CalPERS.

The trend also extends to public agency and classified school employees, who each make up roughly a third of the CalPERS membership and include county, city and non-faculty school workers. These employees also saw about a 13% drop in retirements from 2022 to 2023.

So, why did fewer people retire last year?

One likely explanation is people who would’ve retired in 2023 instead took early retirement during the height of the pandemic, said Nari Rhee, director of the retirement security research program at the UC Berkeley Labor Center.

Another contributing factor could be the dramatic rise in costs over the last few years. Employees who might otherwise want to retire could feel the need to work full-time for longer in order to cover their expenses. They would also increase their retirement benefits by adding to their years of service.

This could very well be the case for younger baby boomers who have reached retirement age, but might not feel financially secure enough to retire.

“The economy hasn’t been very kind to this generation,” Rhee said.

Telework could also make delaying retirement a more attractive option for some workers. Critics of return-to-office policies point out that requiring in-person work could push out state workers who are on the fence about retirement and who would otherwise stay on a few years longer.

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