Pay-Outs From State and Local Pensions Jump
Payments by state and local government retirement systems grew twice as fast as income to the systems last year, the Census Bureau reported Thursday.
A study of government employee retirement systems found that benefit payments, withdrawals and other payments made by the systems jumped 14.6% between 1982-83 and 1983-84.
At the same time, income to the plans, generated by government and employee contributions and investment income, grew by only 7.2%, the study said.
Nevertheless, receipts by the benefit plans remained considerably higher than payments made, and the cash and security holdings of the retirement systems continued to grow, although not as much as in recent years.
Overall, state and local government retirement systems paid out $22.6 billion in 1983-84, the study said. That included $19.8 billion in benefits to retired workers, $2.5 billion in withdrawals by people who left the plans before retirement and $391 million in administrative costs.
More Jobs in Private Business
The most dramatic change from the year before was among people leaving state and local government jobs before retirement and removing their contributions from the pension plans. This increase occurred as the overall economy strengthened and more jobs opened up in private business.
Plan withdrawals of $2.5 billion were up 39.4% from $1.8 billion the year before.
At the same time, benefit payments jumped 13.3% from 1982-83 as workers retired and the amount of payments increased. On the other hand, other payments made by the systems--mostly administrative expenses--dropped 26.7% over the period.
Receipts totaled $62.1 billion in 1983-84, up from $57.9 billion the year before, a growth of 7.2%. But receipts had climbed 18.3% in 1981-82 and 12.7% in 1980-81.
Total cash and security holdings for the systems rose to $323.5 billion, from $289.7 billion a year earlier. That was an increase of 11.6% in holdings, smaller than the 18.1% jump the year before and the 16.5% the year before that.
Investment earnings increased slightly as a source of income for these funds, while employee contributions dropped somewhat and the share of government contributions was steady.
Investment earnings were $28.6 billion in 1983-84, up from $26.2 billion the year before.