Public pensions generate significant economic activity in cities and states across the nation. Public workers and their employers contribute to the pension fund and those pension funds earn a meaningful return on their investments. That money goes back into the local communities, where retirees live and shop, through monthly benefit checks to those retirees. Late last month, the Louisiana Budget Project released an update of their Pensions in the Parishes report, which finds that public pensions are an important source of personal income, especially in Louisiana’s rural parishes.

The Louisiana Budget Project analysis examines Louisiana’s fourteen statewide public pension systems. There are four major statewide systems- ones for state employees, teachers, school employees, and police officers- that cover about three-fourths of pension members and retirees. The remaining quarter of pension beneficiaries are members of the ten smaller statewide pension systems. In total, Louisiana’s statewide pension systems pay out more than $4 billion in benefits each year to 164,000 retirees and their families. This amounts to 2 percent of all personal income in the state.

The report goes further though and looks at pension benefits in each parish. Not surprisingly, the largest number of pension recipients live in the most populous parishes, but as a percentage of personal income in each parish, the smaller, more rural parishes receive much more of an impact from public pensions. For many of these parishes, spending from public pension benefits is a vital source of economic activity. In Natchitoches Parish, for example, payments from just three of the largest statewide pension funds total $35.8 million per year. Similarly, in West Feliciana Parish, payments from the state’s three largest pension systems total 3.4 percent of all personal income. The median income in West Feliciana Parish is just $31,196 per year, making the pension payments a key economic driver in the parish.

Traditional pensions are very important for the retirement security of teachers, librarians, sanitation workers, and other public employees, especially in a state like Louisiana where most public employees do not participate in Social Security. However, we should also not overlook the importance of public pensions to the economic life of cities and towns across the nation. Pension benefits will continue to be paid even when the economy slows down and, in that way, pensions can be a key economic lifeline for small communities.