KY Policy Blog

Pension Benefits Inject $3.4 Billion into the Economies of Kentucky Counties

By Jason Bailey
June 6, 2017

As the governor and General Assembly consider additional cuts to pension benefits for employees, it’s important to understand the role such benefits play in local economies. In 2016, public retirees of the Kentucky Employees’ Retirement System, State Police Retirement System, County Employees Retirement System and Kentucky Teachers’ Retirement System received pensions totaling $3.4 billion.  That’s the economic equivalent of an entire industry — for comparison, the accommodations and food services industry in Kentucky generated $4.5 billion in earnings in 2015 while the construction industry generated $7 billion, according to the Bureau of Economic Analysis.

As the interactive map below shows, those pension checks are an important part of the economy in every Kentucky county. Over 94 percent of Kentucky Retirement Systems (KRS) retirees live in Kentucky, and 89 percent of retired teachers. When retirees spend their checks at hardware stores, restaurants and other local businesses, it results in an economic ripple effect that creates jobs. As KRS reports, each $1.00 of benefits supports about $1.43 of total economic activity.

When you cut benefits for current or future public employees and retirees, it harms not just them but the local economies where they live.

One Response to “Pension Benefits Inject $3.4 Billion into the Economies of Kentucky Counties”

  1. Pau says:

    This is an issue that for the past twenty years, I’ve been wondering if anyone has ever thought about…. The current trend is basically to bring everyone down to the lowest common denominator (economically). This started years and years ago with the private sector taking advantage of the 401K and now the Public sector is having it’s way with the worker. If we keep going in this direction, who is going to buy the widgets, not to mention the groceries, cars, etc. Makes no sense.