Public pension plans contributed a net $137.3 billion in revenue to state and local governments in 2016, said a new study from the National Conference on Public Employee Retirement Systems.
The study, "Unintended Consequences: How Scaling Back Public Pensions Puts Government Revenues at Risk," said the total underscores the necessity of public pension plans in how they impact the economy.
The study, which draws on historical data from sources such as the Bureau of Economic Analysis, Bureau of Labor Statistics and U.S. Census Bureau among others, from 1977 to 2016, said that when analyzing the economic contribution of the investment of pension fund assets and the total amount paid to retirees, public pensions contributed a total of $1.3 trillion to the U.S. economy in 2016 and $277.6 billion to state and local revenues.
"Our findings are a powerful rebuke to the popular argument that taxpayers cannot afford public pensions," said Michael Kahn, NCPERS' research director and author of the study, in a news release. "The evidence shows that if public pensions did not exist, taxpayers not only wouldn't save money; they would have to cover a severe annual revenue shortfall."
The study also said while states that are feeling pressure to close their defined benefit plans would shift to defined contribution plans, such a shift would "shave off $182 billion from the economy."
The study is available on NCPERS' website.