Retiree spending of defined benefit (DB) pension benefits generated $1.5 trillion in total economic output, supported 7.1 million jobs across the country, and produced $224.3 billion in tax revenue in 2022, according to“Pensionomics 2025: Measuring the Economic Impact of Defined Benefit Pension Expenditures,” a new study from the National Institute on Retirement Security (NIRS).
Pension spending “supports the economy and supports jobs where retirees reside and spend their benefits,” write the study’s authors, NIRS Executive Director Dan Doonan and Ilana Boivie, assistant director of strategic resources for the International Association of Machinists and Aerospace Workers. The rippling effect of retiree spending in through regional and national economies, which the study calls a “multiplier effect,” is especially true in rural and small communities.
In New York state, researchers found that 1,035,413 residents received a total of $38.7 billion in benefits from state and local pension plans in 2022. Due to the “multiplier effect,” this spending in turn supported a total of $48.6 billion in economic output and $32.3 billion in value added in the state. Pension spending in the state also supported 225,964 jobs that paid $17.0 billion in wages.
“To the extent that DB pensions provide retirees with steady income available for spending regardless of fluctuations in the stock market, DB pensions may play a stabilizing role in the economy like Social Security,” the researchers state in the executive summary. “In contrast, retirees may be reluctant to spend out of their 401(k)-type accounts if their savings are negatively impacted by market downturns.”
“Pensionomics 2025: Measuring the Economic Impact of Defined Benefit Pension Expenditures,” as well as the Pensionomics State Data for New York State, are available now online from the National Institute on Retirement Security (NIRS).
To learn more about how defined public pension plans such as NYSTRS provide its members with retirement security, visit our Pension Education Toolkit page. Additional data on pensions can be found from our Public Pension Partners.
