Friday, February 27, 2009

Report calculates economic benefits of pensions

A report from the National Institute on Retirement Security indicates the spending of pension dollars by government retirees supported significant economic growth in Louisiana.

Beth Almeida, executive director of the institute, said defined benefit pensions — where the retirement benefit lasts a lifetime — allows retirees to maintain spending on basic needs, which in turn has a positive effect on the greater economy.

In 2006, more than 134,000 Louisiana residents received $2.44 billion in pension benefits from state and local government pension plans, the report states. By spending their pension checks, those retirees then supported $3.2 billion of economic activity.

Almeida said the focus on pensions, especially in tight financial times, tends to be on the cost to taxpayers. But the majority of pensions are paid for through employee contributions and investment earnings, she said.

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