State Pension Benefit Estimates

David G. LenzeSouthern Regional Science Association

1 April 2006

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SNA Treatment

Primary income of Household Sector Employer contributions counted as

part of compensation Property income of pension funds is

counted as part of dividends, interest, & rent

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SNA Treatment

Disposable Household Income Contributions (employer & personal)

& Property income deducted Benefits added

Hence: Compensation includes contributions,

but Disposable income includes benefits

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U.S. Pension Benefits (billion $)

A B NIPA1997 470.9 466.4 390.81998 522.7 527.1 397.51999 566.1 595.1 424.52000 612.6 652.2 453.42001 644.1 709.4 484.6

A—Using Form 5500; B—Using Form 1099R

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State Pension Estimates

Source Data

SOI Division expanded IRMF sample 1099-R 5498

ACLI

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Share of Nation—6 largest states, 2000

Pop. Inc. Pens.California 12.0% 13.1%

10.7%Texas 7.4 7.0 4.9New York 6.7 7.9 7.9Florida 5.7 5.4 7.8Illinois 4.4 4.8 4.1Pennsylvania 4.4 4.3 4.3

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Per Capita, 2000 ($)

Personal PensionIncome Benefits

DC 40,456 5,385Delaware 30,869 4,006Hawaii 28,422 3,604Maryland 34,257 3,395Virginia 31,087 3,320Florida 28,509 3,156Maine 25,969 1,446

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Adjustments to US Personal Income, 2000 (billion $)

Personal income 8,429.7 - Net reclassifications 3.0 - Pension contributions 697.7 - Pension Fund Property Income 367.7 + Pension benefits 652.2Cash personal income 8,013.6

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Do Pension Benefits Contain Information Missed by Personal

Income?Sales = .85 Personal Income + 12.1 (5.75) (7.98) R2=0.40

Sales = .70 Personal + .27 Pension +11.5 (4.81) (2.93) (8.05) R2=0.49