SACRAMENTO, CA – The California Public Employees’ Retirement System (CalPERS) today issued the following response to the National Institute on Retirement Security (NIRS) report on the economic benefits of defined benefit pension plans:
“The NIRS report, Pensionomics 2012, reaffirmed that defined benefit plans give America’s local, state and national economies a huge boost,” said Anne Stausboll, CalPERS Chief Executive Officer. “According to the report, the positive impacts are ‘quantifiable’ not only in real dollar purchases and jobs that benefit the service, retail and health industries, but they also benefit the quality of life our seniors experience after retirement.”
The report evaluated data from 2009 and found that prefunded plans, the same type CalPERS administers for our 1.6 million members, added more than $1 trillion to our national economy that year. In addition, 6.5 million American jobs were supported resulting in $315 billion in earnings for those workers. In total, $426 billion in defined benefit pensions were paid to public and private system retirees from federal, state and local systems, which translated into $2.37 of economic output for every dollar paid.
The benefits can also be seen in our own backyard. In California, according to the NIRS study, defined benefit pensions supported more than 300,000 jobs and $52.5 billion in total economic output for our state. That figure includes the value of all goods and services that resulted from retirees spending their pension benefits in California. Our tax revenues were also boosted by $7.7 billion dollars.
As our public policy leaders consider proposals to alter defined benefits of California’s public workers, it is important to keep in mind how a secure retirement paycheck is a vital piece of our State’s economy that we can’t afford to lose.
View a copy of the full report (PDF 1.92 MB) with state-by-state analysis.
CalPERS, with assets of approximately $233 billion, is the largest public pension fund in the U.S. It administers retirement benefits for more than 1.6 million California State, local government, and public school employees, retirees, and their families on behalf of more than 3,000 public employers, and health benefits for more than 1.3 million enrollees. The average CalPERS pension benefit is $2,332 per month. The average benefit for those who retired in the most recent fiscal year that ended June 30, 2011 is $3,065 per month. More information about CalPERS is available at www.calpers.ca.gov.
