Benefits received from state and local defined benefit plans during 2006 generated $358 billion in economic output nationwide and $57 billion in tax revenue and supported 2.5 million jobs that paid workers a total of $92 billion, according to a National Institute on Retirement Security study.
In the current economic crisis, these numbers are quite significant, Beth Almeida, NIRS executive director and the studys co-author, said in a teleconference today.
The findings show that defined benefit plans help stabilize the economy because pension beneficiaries continue spending, even when the economy is bad, Ms. Almeida said.
The study, Pensionomics: Measuring the Economic Impact of State and Local Pension Plans, focused on the economic activity generated by the expenditure of pension benefits in 2006. Among other findings: Every dollar from local and state pension plans resulted in $2.36 in output in 2006. Also, every dollar contributed by taxpayers to state and local pension plans resulted in $11.45 in economic output during that year.
State and local pension plans had about 26 million participants and beneficiaries in 2006, with beneficiaries getting an average payment of $20,867, the study said.
Ilana Boivie, NIRS policy analyst and study co-author, said in the teleconference that 80% of the financing for state and local plans from 1993 through 2006 came from employees and plan investment earnings, with the remainder contributed by government employers.
The study is available on the NIRS website, http://www.nirsonline.org. NIRS is a non-profit group based in Washington that promotes retirement security.