Industry News

On May 5, 2020, the National Conference on Public Employee Retirement Systems (NCPERS) released its biennial study report, Unintended Consequences: How Scaling Back Public Pensions Puts Government Revenues at Risk-2020 Update.  The study analyzed how investment and spending related to public pension funds affect state and local economies and revenues.  According to the report, public pension funds had a positive financial impact on the U.S. economy increasing to $179.4 billion in 2018 from $137.3 billion in 2016, up 30.6%. 

Some of the key findings include:

• In 2018, the investment of public pension fund assets and spending of pension checks by retirees in their local communities contributed $1.7 trillion to the U.S. economy.
• Economic growth attributable to public pensions generated about $341.4 billion in state and local revenues. After taking taxpayer contributions into account of $162 billion, the net positive revenue impact was $179.4 billion.

The report concludes, “Policy makers must preserve and enhance public pensions, building on this time-honored method of ensuring a dignified retirement for those who have dedicated their lives to public service, including firefighters, police officers, and teachers.”

The analysis was based on historical data from 1977 to 2018 from public sources including the Bureau of Economic Analysis, Bureau of Labor Statistics, and U.S. Census Bureau.

The report is available here.