OEA Retirement Systems Update
A new report from the National Institute on Retirement Security (NIRS) details the positive economic impact of defined benefit pensions. The report entitled Pensionomics 2014: Measuring the Economic Impact of DB Pension Expenditures finds that the benefits provided by state and local government pension plans have a sizable impact that ripples through every state and industry in the nation.
Specifically, the report finds that pension expenditures in the year 2012 nationwide:
- Had a total economic impact of more than $943 billion
- Supported 6.2 million American jobs
- Those jobs paid nearly $307 billion in labor income to American workers
The report also analyzes the economic impact of pensions in each state. The findings in Ohio are dramatic:
- State and local pension funds paid a total of $12.1 billion in benefits to Ohio residents in 2012. Retiree expenditures from these benefits supported a total of $19.7 billion in economic output.
- The average pension benefit received was $28,351 per year. These are modest benefits provided to retired teachers, ESPs, safety personnel and other public servants.
- For every dollar contributed by Ohio taxpayers to pensions over 30 years, $5.71 was paid out in benefits. This reflects that employees contribute toward their pensions and investment earnings make up the majority of pension funding.
The information in the NIRS report is another powerful way to defend public pensions against attacks from those who wish to deny the earned benefits of public employees or profit from moving away from defined benefit plans. More information is available at www.nirsonline.org.