By James Comtois
Source: Institutional Investor
State and local lawmakers have been looking to make cuts to public pension plans to reduce costs. But new research shows that these potential short-term savings could come at a steep long-term cost.
The National Conference on Public Employee Retirement Systems (NCPERS) has found that defined benefit pension plans generate far more in state and local tax revenue than they cost taxpayers. In 2023 alone, pensions generated nearly $662 billion in tax revenues and contributed nearly $3 trillion to the U.S. economy.
Yet the political appetite for shifting to defined contribution plans like 401(k)s persists. NCPERS warns that the trend could undermine state and municipal revenues.