The Homa Files

The flap over government employees’ pensions resurrected an old question of mine: I’ve always wondered what retired members of the Congress and Senate got to live on when they retired.  Here’s the scoop ..:

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Members of Congress are eligible for a pension at age 62 if they have completed at least five years of service.

Members are eligible for a pension at age 50 if they have completed 20 years of service, or at any age after completing 25 years of service.

The amount of the pension depends on years of service, an accrual rate (2.5%), and the average of the highest three years of salary.

For example, after 30 years of Congressional service and a high-3 average salary of $161,800, the initial annual Civil Service Retirement System (CSRS) pension for a Member who retired in December 2006 at the end of the 109th Congress would be: 
                $161,800 x 30 x .025 = $121,350

• Note: It’s unclear whether the qualifier is Congressional service or civilian government service … both terms are used.
• Note: Base pay for Representatives and Senators was $165,200 in 2006.

Federal law limits the maximum CSRS pension that may be paid at the start of retirement to 80% of the Member’s final annual salary

As of October 1, 2006, 413 retired Members of Congress were receiving federal pensions based fully or in part on their congressional service. Of this number, 290  had retired under CSRS and were receiving an average annual pension of $60,972.

In 1983, Congress passed a law (P.L. 98-21) that required all federal employees first hired after 1983 to participate in Social Security.

The law also required all members of Congress to participate in Social Security as of January 1, 1984, regardless of when they first entered Congress.

Because the CSRS was not designed to coordinate with Social Security, Congress directed the development of a new retirement plan for federal employees, called the Federal Employees Retirement System (FERS), which does coordinate a federal pension with Social Security.

A total of 123 Members had retired with service under both CSRS and FERS or with service under FERS only. Their average annual pension was $35,952 in 2006.

Since, on average, SS benefits are typically around $24,000 annually,  the total is bumped to about $60,000.

Bottom line: a typical member of Congress get a pension of about $60,000. 

According to the National Taxpayers Union, the Congressional pension program is about two-to-three times more generous than the average corporate executive pension plan, .

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Source:
http://www.senate.gov/reference/common/faq/retirement_for_members.shtml

Full report:
http://www.senate.gov/reference/common/faq/retirement_for_members.shtml

This entry was posted on March 10, 2011 at 6:50 am and is filed under Gov't Waste & Inefficiency, Gov't Spending. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.