Study: AL pensions help sustain Alabama's economy - WDAM-TV 7-News, Weather, Sports-Hattiesburg, MS

Study: AL pensions help sustain Alabama's economy

MONTGOMERY, AL (WSFA) -

The more than $25 billion worth of pension funds that are administered by the Retirement Systems of Alabama help to support more than 36,000 jobs in Alabama. That's according to a new study.

The National Institute on Retirement Security examined each state's pension funds to see how the taxpayer funded contributions translate into consumer spending on behalf of retirees and active pensioners.

"It shows that there's a multiplier of 7.79 for each dollar paid by taxpayers into pension funds in Alabama," said Leura Canary, RSA's Chief Counsel. "They get 7.79 worth of economic impact for that dollar."

But one of the state's economists isn't sold on the study.

"The methodology worries me," said Dr. Keivan Deravi, a professor of economics who has also helped to recruit companies like Mercedes-Benz, Airbus, and Hyundai to Alabama.

Deravi says you can't look at money that's already being circulated in Alabama as a way to measure economic impact because one way or another that money will see some kind of activity in the state.

"There's no question about the fact that the money spent by retirees creates economic impact but that economic impact was originally due to happen at some other point in time," Deravi said.

Canary says the study has value in explaining that pension funds provide consistent value to those who depend on it before and during retirement. Canary added that the design of the RSA's defined benefit plan protects members from the ebbs and flows of international market conditions.

Some states have floated the idea of converting future retirement plans for state employees to those that would more closely resemble 401K plans, which are more susceptible to peaks and valleys in earnings and losses.

"401Ks shift the risk of the market to the individual and so people can't depend on a steady income with a 401K like they can a pension system and so they're more apt to spend and make financial plans based on that steady income," Canary said.

Deravi described the study as a sort of "shell game," comparing the study's results to proving how you can move money from one hand to another.

"The only factor that we have to consider, taking into consideration economic impact, is value added at fresh point. It has to be money that was already not leaked from the system," Deravi said.

Copyright 2014 WSFA 12 News. All rights reserved.

  • Local NewsLOCALMore>>

  • Over 400 auto burglaries in Hattiesburg, HPD turns to technology to help

    Over 400 auto burglaries in Hattiesburg, HPD turns to technology to help

    Tuesday, November 21 2017 8:28 AM EST2017-11-21 13:28:00 GMT
    Photo credit: WDAMPhoto credit: WDAM

    So far, in 2017 the Hattiesburg Police Department has recorded 454 auto burglaries in the Hub City. MOBILE USERS WATCH LIVE HERE An auto burglary is considered a “Part 1 Offense,” and it’s one thing the police department is setting their sights on reducing. “Any citizen of Hattiesburg should be able to go to the actual local shopping center and go there and not have to worry about their vehicle getting broken in to," said Hattiesburg Police De...

    More >>

    So far, in 2017 the Hattiesburg Police Department has recorded 454 auto burglaries in the Hub City. MOBILE USERS WATCH LIVE HERE An auto burglary is considered a “Part 1 Offense,” and it’s one thing the police department is setting their sights on reducing. “Any citizen of Hattiesburg should be able to go to the actual local shopping center and go there and not have to worry about their vehicle getting broken in to," said Hattiesburg Police De...

    More >>
  • WDAM has learned more about the car wreck that killed 20 year old Tyone Clemons.

    More details revealed in wreck that killed EMCC athlete

    More details revealed in wreck that killed EMCC athlete

    Monday, November 20 2017 11:35 PM EST2017-11-21 04:35:30 GMT
    Tyone Clemons. SOURCE: EMCC AthleticsTyone Clemons. SOURCE: EMCC Athletics

    WDAM has learned more about the car wreck that killed 20 year old Tyone Clemons. He was an East Mississippi Community College defensive lineman, and was a former West Jones High School all star athlete. Jessica Bowman was at the scene in Jones County Monday learning more about who Clemons was in the car with and what happened during this deadly accident Saturday morning.  Best Friends, teammates and brothers. That's what best describes 20 year old Tyone Clemons and 19 year old T...

    More >>

    WDAM has learned more about the car wreck that killed 20 year old Tyone Clemons. He was an East Mississippi Community College defensive lineman, and was a former West Jones High School all star athlete. Jessica Bowman was at the scene in Jones County Monday learning more about who Clemons was in the car with and what happened during this deadly accident Saturday morning.  Best Friends, teammates and brothers. That's what best describes 20 year old Tyone Clemons and 19 year old T...

    More >>
  • USM blasts Blue Mountain, 90-46

    USM blasts Blue Mountain, 90-46

    Monday, November 20 2017 10:30 PM EST2017-11-21 03:30:48 GMT
    Photo credit: USMPhoto credit: USM

    The University of Southern Mississippi opened play in the Sanford Pentagon Showcase Monday night about 1,100 miles from the site of the round-robin tournament’s next three rounds. 

    More >>

    The University of Southern Mississippi opened play in the Sanford Pentagon Showcase Monday night about 1,100 miles from the site of the round-robin tournament’s next three rounds. 

    More >>
Powered by Frankly