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Texas Receives Huge Economic Boost from Pension Payments

A new study from National Institute on Retirement Security shows that pensions in and outside Texas generate $12.1 billion in direct payments to Texas residents. Pension benefits are then spent in local communities, rippling their effects as one person's spending becomes another person's income.

New Pensionomics Report indicates Texas economy gets $12 billion boost from state and local pension benefits

The National Institute on Retirement Security took another look at the economic impacts of pension payments in 2012 to retired state and local government employees.

The key finding: pensions in and outside Texas generate $12.1 billion in direct payments to Texas residents. Pension benefits are then spent in local communities, rippling their effects as one person's spending becomes another person's income. The multiplier effect of these benefits supported $23.7 billion in total economic output per the chart below.

You can read the entire report here.

We are always impressed by the overall amounts of benefits that the pensions generate from employer and employee contributions to the funds. Here's the telltale paragraph:
Between 1993 and 2012, 21.80% of Texas's pension fund receipts came from employer contributions, 16.09% from employee contributions, and 62.11% from investment earnings. Earnings on investments and employee contributions -- not taxpayer contributions -- have historically made up the bulk of pension fund receipts.
In essence, this 62.11% is imputed savings to taxpayers for the benefits received by their public employees. Don't tell the IRS or they'll find out some way to tax that from us! -- Max Patterson

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