January 09, 2023
Pension Spending During Covid Pandemic Provided $1.3 Trillion to the Economy
Retirees who spent their public and private sector pension benefits in 2020 generated $1.3 trillion in total economic output, supporting nearly 6.8 million jobs across the nation, according to a report released last Wednesday by the National Institute on Retirement Security. The real estate, food services, health care, and retail sectors of the economy saw the biggest employment impacts.
The study, entitled Pensionomics 2023: Measuring the Economic Impact of Defined Benefit Pension Expenditures, also found that pension spending added nearly $157.7 billion to government coffers at the federal, state, and local levels.
“Pension benefits not only provide financial security for retirees, but also boost the economy,” said Robert Roach, Jr., President of the Alliance. “At the height of the COVID pandemic, retirees with pensions were able to spend at their normal rate. That spending supported millions of jobs during a time of massive layoffs. In contrast, many retirees relying on 401(k) accounts during that period were afraid to spend their savings, and that added to the economic turmoil.”
A map with downloadable state fact sheets regarding the economic impact of state and local pension plans is available here.