“Louisiana’s defined benefit plans provide a lot more than retirement security. They are also a key economic driver supporting households and businesses across this state,” said Jan Moller, executive director of the Baton Rouge research and advocacy group.
The report found that the state’s 13 pension systems’ payments to more than 150,000 retirees annually is the equivalent of 1.7 percent of all personal income in the state.
“They support businesses in every town and parish,” Moller said. “People spend this income.” He said it is particularly important in some of the state’s poorer parishes.
Moller said legislators should be mindful of the economic impact in their communities as they look at any restructuring or changes affecting benefits.
The Budget Project report comes in advance of the 2014 legislative session, which opens March 10 and when various pension system proposals will be up for consideration.
The report’s author Steve Spires said the pension checks for state and local retirees account for one in every $10 of retirement income in Louisiana. He said it is one in $6 in some of the state’s rural and poorer parishes.
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, according to the report. In a few parishes, pensions are responsible for as much as 2.5 percent or 3 percent of all personal income.
The $3 billion in retirement benefits is 1.7 percent of all pension income in the state, Spires said.
The state’s four statewide pension systems for state employees, teachers, school employees and State Police are responsible for $2.4 billion of the benefits, Spires said.
“That’s money that’s not just sitting in bank accounts. That’s money that’s spent,” Spires said. “It really helps support jobs in every town and parish throughout Louisiana.”
Source: The Advocate