Report: AZ Public Pensions Boost State's Economy
Friday, January 31, 2020
PHOENIX, Ariz. - Healthy pension plans for public workers help the Arizona economy, not just the retirees who get the checks, according to the latest research.
Backers of Arizona's public pension system say their defined-benefit retirement plans are doing well, although critics have claimed that some plans may be under-funded. The National Institute on Retirement Security says the benefits from these pension plans - including teachers' - generated more than $7 billion in economic activity in Arizona in 2016, the most recent figures available.
Julie Horwin, president of the Arizona Education Association-Retired, agrees they're helping to keep the economy strong.
"Pensions are not just an entitlement given to people who are older," says Horwin. "They're actually one of the chief economic engines that drives Arizona. Without those pensions, our economy would suffer a great deal."
One example of criticism was a recent op-ed by the research group Arizona Chamber Foundation. It warned that local and state governments are regularly having to increase their pension-plan contributions, suggesting this could eventually lead to solvency problems.
The National Institute on Retirement Security research breaks down the numbers further, showing that each dollar invested by Arizona taxpayers in public pensions supports more than $6 in economic activity.
Institute Executive Director Dan Doonan says defined-benefit pensions also have advantages for retirees over other forms of savings.
"What we'll see more with the 401(k), as retirees retire, it's not really clear how much you can pull out each year," says Doonan. "So, you spend your working years saving - and then you retire, and you're sort of afraid to use the money you save for retirement, because you don't know what's coming."
Doonan adds it is difficult for many workers to save enough for retirement, making a pension even more critical.
"We looked at the median savings of workers and it's basically zero dollars," says Doonan. "And even amongst those nearing retirement, it's about $88,000. That's a lot of money - but if you think in terms of a few decades in retirement, it's not a lot of income per year."
Despite claims that public pensions are draining state and local coffers, he adds only about one-quarter of contributions to Arizona pensions are from employers. The rest are from employees and the successful investment of pension funds.
get more stories like this via email
Tribes in far northeastern California are pressing President Joe Biden to create a new national monument about 30 miles from Mount Shasta. The Pit …
Every state has been screening newborns for several decades, usually performing a heel-prick blood test, a hearing test and a heart check. Several …
Maine could become the first state in the nation to provide public funding to candidates seeking the office of district attorney. Lawmakers are …
The Oregon Fish and Wildlife Commission has decided to list Southern Resident orcas as an endangered species. With it comes guidelines for how the …
Student loan borrowers of all ages in Nevada and around the country have an opportunity to have their student loans canceled or the chance to receive …
Early voting for primaries in Michigan began this weekend. Rep. Rashida Tlaib, D-Mich., in a change from Democratic support, urged voters to block …
Health and Wellness
February is National Teen Dating Violence Awareness and Prevention Month, and young people often find it hard to navigate experiences of harm…
Indiana climate leaders gathered this month to share knowledge and create strategies to address the effects of climate change. Together, they are …