Defined Benefit Plans: Benefits Beyond Service Retirement

“Virtually every state and local economy across the country benefits from the spending of pension checks.”1

When we think about the benefits pension systems across the country provide, we think immediately of the benefits we pay directly to our members: service retirement, disability retirement and beneficiary benefits. To be sure, these benefit payments are the reason a Defined Benefit, or DB plans exist … to provide retirement security for members and their families.

But Defined Benefit plans have a much larger, positive economic impact than just helping retirees pay the bills. Described in detail in a recent research report from the National Institute on Retirement Security, it’s called the multiplier effect. If you haven’t already, check out this recent report and learn more about the economic impact in your state.

[1] Ilana Boivie and Dan Doonan. “Pensionomics 2021: Measuring the Economic Impact of DB Pension Expenditures,” National Institute on Retirement Security, January 2021.

read the full report at NIRS