PA Pensions Inject Millions into Local Economies

Stephen Herzenberg |

Pension benefits earned by retired teachers, first responders, and public health workers inject millions of dollars into regional and local economies across Pennsylvania, according to a new report from the Keystone Research Center. Statewide, $7.6 billion in pension benefits were paid out to Pennsylvania residents, generating an estimated $13.2 billion in economic activity.

This is a point that often gets overlooked in the current pension debate. Public pension benefits send positive ripple effects through local economies across the state. Retired school and state employees shop at local stores, eat at corner diners, and receive care in community nursing homes—and pension benefits help make that economic activity possible.

Governor Corbett’s pension plan would jeopardize the retirement security of a future generation of workers, and that would harm the economies of many communities across Pennsylvania.

Our report shows that in 11 counties, most of them more populous urban counties (Allegheny, Berks, Bucks, Chester, Cumberland, Dauphin, Delaware, Lancaster, Montgomery, Philadelphia, and Westmoreland), retirement benefits exceeded $225 million.

As a share of the local economy, Pennsylvania’s statewide public pension plans are most important in lower-income rural areas. In 34 of 67 counties, most of them rural, Pennsylvania’s statewide retirement plans accounted for 2% or more of the regional economy.

By metro area, retirement system payments accounted for more than 3% of personal income in State College, and between 2% and 3% in Johnstown-Altoona and Harrisburg-Lebanon-Carlisle. Check out the policy brief for more details.