Louisiana’s state pension systems are vital to working families and retirees across the state, serving as key economic drivers, particularly in rural areas, where public pension benefits are a substantial source of personal income and economic activity, according to a new report.
The report, “Pensions in the Parishes 2017,” from the Louisiana Budget Project (LBP), surveyed how the state’s pension systems impact each parish, and shows the combined economic impact of the three largest state retirement systems: the Louisiana State Employees’ Retirement System (LASERS), the Teachers Retirement System of Louisiana (TRSL), and the Louisiana State Police Retirement System (LSPRS).
According to the report, Louisiana’s pension systems pay out more than $4 billion in benefits to 164,000 retirees and their families every year, which translates to 2% of all personal income in the state, up from 1.7% in 2014.
“When considering changes to state retirement systems, policymakers should keep in mind the impact pensions have in supporting local businesses and jobs in every parish across the state,” LBP Director Jan Moller said.
Moller cited West Feliciana Parish, where payments from the state’s three largest pension systems total 3.4% of all personal income, and nearly 19% of all retirement income.. “That steady source of income is vital to the parish’s economy, where one in five residents live below the poverty line,” Moller said.
The LBP monitors and reports on public policy, and how it affects Louisiana’s low- to moderate-income families.
The report found that payments to retirees in the state’s 14 pension systems account for one of every 10 dollars of retirement income in the state.
“These dollars don’t just sit in savings accounts,” said the report, “but are spent and pumped back into local economies where they have a substantial economic impact, supporting everything from car dealers and restaurants to grocers and hospitals.”
The report also compared the $4 billion economic impact of Louisiana’s pension payouts with the payrolls of some of the state’s largest industries. For example, total compensation for all hospital employees was $5.3 billion, while restaurant and other food service workers made around $4 billion. Workers in the chemical manufacturing industry were paid $3.4 billion in 2015, while employees of car dealers and auto part stores earned a collective $1.8 billion.
Louisiana has four state pension systems, which include LASERS, TRSL, LSPRS, and the Louisiana School Employees Retirement System (LSERS) for non-teacher school employees. There are an additional 10 pension systems for local government employees, such as pensions for district attorneys, firefighters, and municipal workers.