As the Legislature prepares for another session of tinkering with Louisiana’s public retirement systems, a new report by the Louisiana Budget Project looks at the ways public pensions pump money into local economies.
Louisiana’s defined-benefit pension plans are more than just retirement security for teachers and state workers. They also represent a key economic driver that support households and businesses in every city, town and parish of the state.
Altogether, Louisiana’s 13 pension systems pay out more than $3 billion in benefits to 150,000 retirees and their families every year – an amount equivalent to 1.7 percent of all personal income in the state. The money paid out by these retirement systems compare favorably to the payrolls of Louisiana’s prominent industries, such as chemical manufacturing and hospitals, and contributes to the economic well-being of every city and parish.
- Pensions for state and local government retirees account for 1 in every 10 dollars of retirement income in the state. In some rural parishes, pension payments make up nearly 1 in 6 retirement dollars.
- But when benefits are calculated as a share of each parish’s personal income, it is clear that pensions are especially crucial to the economic health and retirement security of smaller and more rural parishes. In a handful of parishes, pensions account for as much as 2.5 percent or 3 percent of all personal income.
“The lesson from our research is clear: Before legislators do anything to restructure our state retirement systems, they must be mindful of the major economic impact these retirement dollars have on local communities,” Louisiana Budget Project Director Jan Moller said.
These dollars don’t just sit in savings accounts, but are spent and pumped back into local economies, where they pack a big economic impact, supporting everything from car dealers and restaurants to grocers and hospitals.
Find out more about how pension benefits affect the state and individual parish economies in Louisiana Budget Project’s new report, Pensions in the Parishes by LBP Policy Analyst Steve Spires.