New Report on the Value of Public Pensions. As we know, defined benefit pensions not only provide a secure retirement for our members; they also contribute to economic vitality though the stable income that seniors spend in our communities. Just out this week, NCPERS released a research paper, 2020 Unintended Consequences, that shows that public funds helped power the U.S. economy, generating $179.4 billion more in state and local government tax revenues than plan sponsors contributed to their plans. This report built upon a 2018 report that documented state and national tax revenue generated by public pensions. This is a great update and complement to the often-cited Pensionomics 2018 report, released by NIRS, which found that retirees’ spending of pension benefits in 2016 generated $1.2 trillion in total economic output, supporting some 7.5 million jobs across the U.S.
Our Pensions Are Not the Problem. Not only are our pensions economic drivers, using progressive tax and revenue policy, states have tools to fund them. To highlight the connection between tax policy and pension funding, Good Jobs First released the second installment of its 13-state report, “Putting State Pension Costs in Context.” This report found that Colorado, Georgia, Louisiana, Missouri, South Carolina, Texas, and Vermont together spend more than $17 billion per year in corporate development subsidies and tax breaks, which is about five times those states’ yearly pension obligations. The first report, released in January 2020, looked at Arizona, Connecticut, Kansas, Kentucky, Oklahoma, and Wyoming and found that huge tax breaks and other subsidies to corporations also exceeded pension obligations in those states.
A Pension Defense Toolkit. With concerns about pension defense on the rise, we want to share the Public Pension Defense Toolkit from NCPERS, attached, which includes legislative action checklists, state case studies and guidance for media work. Another helpful resource is a 2019 NIRS report, showing that shifting new employees from defined benefit pensions to defined contribution or cash balance plans actually resulted in increased taxpayer costs without any major improvements in funding. The report, Enduring Challenges: Examining the Experiences of States that Closed Pension Plans, draws from case studies in four states that closed their pension plans in favor of alternative plan designs: Alaska, Kentucky, Michigan, and West Virginia.
Additionally, the National Public Pension Coalition, which supports state level pension defense coalitions, has a wealth of pro-pension resources at the ready for states, including videos on pensions and pension opponents, and pension one-pagers and reports.