Pension Income Accounted for $1.5T of US Economic Output in 2022

Private and public sector defined benefit pension fund payments also added $224.3 billion in tax revenue, according to the National Institute on Retirement Security.

More than $680 billion in pension benefits were paid to 26.3 million beneficiaries in 2022, according to new research from the National Institute on Retirement Security’s “Pensionomics 2025” report, which quantified the economic impact of defined benefit pension expenditures.

“Virtually every state and local economy across the country benefits from the spending of pension checks,” wrote the report’s authors, NRIS Executive Director Dan Doonan and Ilana Boivie, an assistant director of strategic resources for the International Association of Machinists and Aerospace Workers. “For example, when a retired nurse residing in the state of Wisconsin receives a pension benefit payment, s/he spends the pension check on goods and services in the local community. S/he purchases food, clothing, and medicine at local stores, and may even make larger purchases like a car or laptop computer. These purchases, combined with those of other retirees with pensions, create a steady economic ripple effect.”

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The research found that of the $680.2 billion paid out to 26.3 million retirees, approximately $371.6 billion was paid out to 12 million retired state and local government employees and their beneficiaries. $91.5 billion was paid out to 2.7 million federal government beneficiaries. Approximately $217.4 billion was paid out to 11.5 million private sector retirees and their beneficiaries, which breaks down as $51.8 billion paid out to 4.1 million beneficiaries of multi-employer defined benefit plans and $165.6 billion paid out to 7.4 million beneficiaries of single-employer plans.

The paper noted that retirees with a defined benefit pension can rely on a steady income stream from their pension and steadily spend despite fluctuations in the market. On the other hand, retirees with a defined contribution retirement plan may be reluctant to spend from these accounts in a market downturn. Because of this, the NIRS noted that DB pensions and their contributions to the economy can be a stabilizing factor, similar to Social Security.

According to NIRS, every $1 paid out in defined benefit retirement income generated an output of $2.28 to the national economy.

“This multiplier incorporates the direct, indirect, and induced impacts of retiree spending, as it ripples through the U.S. economy,” the paper stated.

The paper stated that defined benefit retirement expenditures supported 7.1 million jobs in the U.S., which paid $466.2 billion in labor income, added $871 billion to gross domestic product, generated $224.3 billion in federal, state and local tax revenue, and produced $1.5 trillion in total economic output across the country.

Miller Starts CFP Board Chair Leadership

The adviser head will oversee initiatives that include a push to bring more women into financial planning and the intelligent integration of AI.

The CFP Board announced Tuesday that Liz Miller has started her role as chair of the board of directors, as of January 1.

Miller, founder and president of Summit Place Financial Advisors LLC, will be leading the body that has certified more than 100,000 financial planners across the U.S. She was elected to the post in 2023 by CFP’s board of directors and served as board chair-elect in 2024.

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The position oversees the CFP Board of Standards, which focuses on advancing financial planning and expanding the profession, and the CFP Board Center for Financial Planning, which focuses on developing and administering certification. The CFP split into two nonprofit bodies in January 2023.

Liz Miller

“Last year, we surpassed 100,000 CFP certificants, and we are moving forward from a position of strength in 2025,” Miller said in a statement. “We are making strides to continue growing the financial planning workforce by supporting both the next generation and career changers.”

Miller also highlighted the profession’s “appeal to women,” noting she has spent her entire career in the financial planning industry.

Before founding Summit Place Financial, she was a principal owner of investment management services firm Trevor Stewart Burton & Jacobsen Inc. She also served on the CFA Institute’s wealth management task force and led the first private wealth management committee at the CFA Society of New York.

The CFP Board, under Miller, will continue to work toward increasing women’s representation in financial planning, including the launch of a national initiative, according to the announcement. Work will include research, resource development, thought leadership and partnership development for women.

“Liz is a visionary leader with exceptional experience, passion and commitment,” CFP Board CEO Kevin Keller said in a statement. “Her leadership will help guide us through a rapidly evolving technological landscape, while her commitment to supporting CFP certificants and promoting diversity will help build a more inclusive profession.”

During Miller’s tenure, the CFP Board also plans to work with artificial intelligence experts on the technology’s use in financial planning.

In December, the CFP announced a record year for its certification exam, with 10,437 candidates testing in 2024, the highest annual total to date. Among those who tested, 6,763 candidates passed,  11% more than in 2023.

Miller earned her certified financial planner certification in 2008 and also holds the chartered financial analyst designation.

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