State and local government pensions supported 2.5 million jobs and contributed $358 billion to the economy in fiscal years 2005-2006, according to an economic impact analysis by the Washington-based National Institute on Retirement Security (NIRS). The report, "Pensionomics: Measuring the Economic Impact of State and Local Pension Plans," tracks expenditures from state and local pension plans in every state.
The $151.7 billion in pension benefits paid to 7.3 million beneficiaries also contributed to $57 billion in annual federal, state and local tax revenue during the 2005-2006 period, according to "Pensionomics." Also, the benefits served as an "economic multiplier" in that each taxpayer dollar invested in the plans supported $11.45 in total economic activity, and each dollar paid out in benefits supported $2.36 in economic activity. "This study measures the magnitude of the 'multiplier effect' of state and local pensions in the U.S. economy," said Ilana Boivie, NIRS policy analyst and "Pensionomics" co-author, in a statement. "The multiplier effect occurs because one retiree's spending becomes another person's income."
View the entire report on NIRS' Web site.