Public Pensions Benefit Pa.’s Economy

According to the National Association of State Retirement Administrators, applying a standard economic multiplier to measure the effect of additional dollars being distributed into the economy by state pensioners, the stimulus to the Commonwealth’s is great.

State and local pension funds in Pennsylvania and other states paid a total of $8.6 billion in benefits to Pennsylvania residents in 2009. Retirees’ expenditures from these benefits supported a total of $13.7 billion in total economic output in the state, and $7.9 billion in value added in the state. $6.5 billion in direct economic impacts were supported by retirees’ initial expenditures.

An additional $3.6 billion in indirect economic impact resulted when these businesses purchased additional goods and services. $3.7 billion in induced impacts occurred when employees hired by businesses as a result of the direct and indirect impacts made expenditures.

Benefits  provided by Pennsylvania’s public pension plans have a sizable impact that ripples across the state. The new report, “Pensionomics: Measuring the Economic Impact of State and Local Pension Plans,” finds that expenditures made from Pennsylvania’s public pension benefits for 2009:

• Had a total economic impact of more than $13.7 billion.

• Supported more than 99,383 jobs that paid more than $4.6 billion in total compensation to Pennsylvania’s workers.

• Supported more than $1.8 billion in annual federal, state, local tax revenue. • Paid $8.6 billion in pension benefits to 384,834 retirees and beneficiaries.

• Had large multiplier effects. Each taxpayer dollar invested in Pennsylvania’s public pensions supported $7.95 in total economic activity, while each dollar paid out in benefits supported $1.59 in economic activity.

• Impacted every industry in the state.

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