A new report from the National Institute on Retirement Security (NIRS) claims that state, local, federal, and private pensions contribute $555 billion to the American economy's GDP. They write:
This is roughly the same amount of value added as was contributed by the entire construction industry, which generated $581.1 billion in value added in 2012.
Using the same methodology, NIRS could claim that pensions contribute more than three times as much value to the Gross Domestic Product as a category labeled "Agriculture, forestry, fishing, and hunting." To put it another way, NIRS is claiming that pensions contribute more economic value than the combined total of all air, rail, water, truck, transit, and pipeline transportation.
These comparisons should strike you as insane. Pensions are a savings and investment tool that transfer money from one class of people (workers) to another (retirees). Like Social Security, pensions may be large in terms of dollar amounts but their sheer size should not distract us. Although NIRS wants to double-count it, pension investments in the stock market are already reported in official GDP calculations when companies spend money building a plant or buying raw materials. Pensions themselves don't actually contribute to GDP. NIRS is a pension trade group so they have an incentive to suggest otherwise. But you don't have to take their claims at face value.