$1.2 trillion and 7.1 million jobs from pension spending in U.S.Staff Writer | September 15, 2016
A new report finds that economic gains attributable to defined benefit (DB) pensions in the U.S. are substantial.
In America Pensionomics 2016: Measuring the Economic Impact
Pension spending also filled government coffers with retirees paying a total of $190 billion in federal, state and local taxes on their pension benefits and spending 2014.
Pensionomics 2016: Measuring the Economic Impact of Defined Benefit Pension Expenditures released by the National Institute on Retirement Security, cover spending and its impact.
Pensionomics 2016 comes at a time when economists are predicting dramatic drops in economic growth in the coming decades.
A recent McKinsey Global Institute study indicates that factors including an aging workforce and declines in population growth could reduce economic growth by one-third in the U.S. and 40 percent globally.
Nearly $519.7 billion in pension benefits were paid to 24.3 million retired Americans in 2014 including:
- $253 billion paid to some 9.6 million retired employees of state and local governments and their beneficiaries (typically surviving spouses);
- $78.8 billion paid to some 2.6 million federal government retirees and beneficiaries; and
- $187.9 billion paid to some 12.1 million private sector retirees and beneficiaries.
Expenditures from these payments collectively supported:
- 7.1 million American jobs that paid $354.8 billion in labor income;
- $1.2 trillion in total economic output nationwide;
- $627.4 billion in value added (GDP); and
- $189.7 billion in federal, state, and local tax revenue. ■