The NIRS study, released last week, measures the economic ripple effect of retiree spending of traditional pension benefits, a stable source of income that lasts through retirement. Among the key findings for expenditures made from all public, private, and federal government pension benefits in the U.S. in 2012:
- A total economic impact of more than $943 billion;
- Support for 6.2 million American jobs, paying nearly $307 billion in labor income to American workers;
- Support for more than $135 billion in federal, state, local tax revenue; and
- Nearly $477 billion in pension benefits paid to 24 million retired Americans and beneficiaries.
for the complete study, “Pensionomics 2014: Measuring the Economic Impact of DB Pension Expenditures.”
The study finds that in Connecticut, retiree expenditures stemming from state and local pension plan benefits supports 40,249 jobs, representing 2.1 percentage points in our state’s labor force. The total income in 2012 to state residents supported by pension expenditures was $2.4 billion.
The NIRS study also documents how the nation’s $3 trillion state and local public pension system paid out $228 billion in benefits in 2012 — an average annual benefit of $25,354, or a little more than 150 percent of the federal poverty line for a retired couple. The study’s authors conclude that cutting guaranteed benefits or converting traditional public pension plans into 401(k) accounts would harm economies by reducing the amount of pension benefits spent by retirees.
for the NIRS webinar announcing the study’s release.