Economic gains attributable to defined benefit (DB) pensions in the U.S. are substantial. Retiree spending of pension benefits in 2018 generated $1.3 trillion in total economic output, supporting nearly seven million jobs across the nation. Pension spending also added nearly $192 billion to government coffers at the federal, state and local levels.

Pensionomics 2021: Measuring the Economic Impact of Defined Benefit Pension Expenditures calculates the national economic impacts of U.S pension plans, as well as the impact of state and local plans on a state-by-state basis. This study finds that in 2018:

$578.7 billion in pension benefits were paid to 23.8 million retired Americans, including:

• $308.7 billion paid to some 11.0 million retired employees of state and local government and their beneficiaries (typically surviving spouses);
• $105.9 billion paid to some 2.6 million federal government beneficiaries;
• $164.1 billion paid to some 10.1 million private sector beneficiaries, including:
• $44.2 billion paid out to 3.8 million beneficiaries of multi-employer pension plans, and
• $119.9 billion paid out to 6.3 million beneficiaries of single-employer pension plans.

Expenditures made out of those payments collectively supported:

• 6.9 million American jobs that paid nearly $394.2 billion in labor income;
• $1.3 trillion in total economic output nationwide;
• $703.9 billion in value added (GDP); and
• $191.9 billion in federal, state, and local tax revenue.

Pension expenditures have large multiplier effects:

• Each dollar paid out in pension benefits supported $2.19 in total economic output nationally.
• Each taxpayer dollar contributed to state and local pensions supported $8.80 in total output nationally. This represents the leverage afforded by robust long-term investment returns and shared funding responsibility by employers and employees.