Congressional Retirement Plans

Posted: December 1, 2011 in News and politics
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The Love Chronicles

By John Love

This is an article written by Martin Frost, a former congressman and contributor to Fox News, an organization who has no problem slanting the news or just not reporting on what they do not like, but jumping all over another candidate or politician for exactly the same thing. I have however researched this info before, found it to be true and am using this article because it explains the House and Senate retirement packages very well and how they work.

Members of Congress (House and Senate) take part in a defined benefit plan (once retired, they receive a specific monthly benefit based on years of service). They do not retire at full pay and their pension is a contributory plan — that is, they have a significant amount deducted from their salary each month to help defray the cost of their pension benefits. This defined benefit plan is comparable to pensions offered by big companies like General Motors except that in some instances the companies underwrite the entire cost of the plan.

Members of Congress are eligible for one of two plans, depending on when they were first elected. Members elected before 1983 take part in the CSRS plan which has more generous defined benefits. Members elected after 1983 take part in the FERS plan available to all federal employees. It has a smaller defined benefit but a more generous 401(k) (described more fully below).

Members under the old CSRS plan receive a pension equal to 2.5 percent of their highest salary for each year of service. Thus, a member who serves 10 years would receive a pension equal to 25 percent of his salary. Members under the new FERS plan receive pension equal to 1.5 percent of their highest salary for each year of service. Thus a Member serving 10 years would receive a pension equal to 15 percent of his salary.

In addition, all members, starting in 1983, now pay into Social Security and receive Social Security benefits. For members under the old CSRS plan, their Social Security benefits are offset (subtracted from) their pension. For members under the new FERS plan, there is no Social Security offset. It is not unusual for retired workers to receive a pension from their private employer and to also receive Social Security. Somehow, many people think members of Congress should not be eligible for the exact same treatment that employees in private industry receive.

Members under the old more generous CSRS plan are eligible for participation in a separate 401(k) plan under which a certain amount is deducted from their salary each month and is not taxed until after they retire. This 401(k) deduction is not matched by their employer, the federal government. Members under the new FERS plan also can take part in a 401(k) plan and they receive a partial match from their employer.

Generally, members are not eligible to receive their pension until age 60 and their pensions vest after five years of service.

I know this is a lot of information but don’t be afraid of being armed with the facts. The misconceptions that float around on the internet — retirement at full pay after one term and no payment into Social Security — are false and unfair to public servants who devote a significant amount of their lives to making this a better country.

Having said all this, I realize that some people will resent the fact that members of the House and Senate receive any pension at all. I can’t do anything for people who take this view.

I can, however, give you information about what is true and what is false. You can then at least make a rational judgment on whether or not you approve of the Congressional pension system. Improvements can be made. Convicted criminals like former Rep. Duke Cunningham (R-Calif.) should forfeit their pensions when they are convicted of felonies like taking a bribe.

Also, it is legitimate to question whether or not these pensions should be indexed for inflation each year. Many private pensions are not indexed though military pensions and Social Security are.

So there are several posts out there that want you to repost and join a movement for supporting a movement that would end with a new 28th Amendment which states that “Congress shall make no law that applies to the citizens of the United States that does apply equally to the Senators and/or Representatives; and, Congress shall make no law that applies to the Senators and/or Representatives that does not apply equally to the Citizens of the United States.”

End of the Martin Frost Statement 

I am one of those that believe that serving your country as a Senator or Representative is an honor and duty, not a career. Term limits should be enforced, keeping entrenched politicians from making it their life’s work. With that being said I am also one of those that think they should not receive any pension whatsoever, they should put in a set term, maybe a longer six year term but only one, and then return to the private sector where they will receive retirement and 401k plans from their employers just like the rest of us. I do think they need to receive a salary commensurate with the very important job they are asked to do. I think they should be given fair allowance to staff an office, but all Senators and Representatives should get the same amount of allowance. If, for example you are on a committee that is going to take more staff and more hours, a fair increase to the allowance can be made, but not in the amount of salary that the politician makes.  The paramount change I think most important, no politician should be allowed to have contact with any lobbyist for any reason. He/or she should not be allowed contributions by any companies, corporations, or countries, only individual voters. Lobbyists who have legitimate claims can take them to congress as a whole, just like everyone else. It should be made to be a considerable infraction of the law to lobby any politician for any reason, or for that politician to accept a job from any company he was not associated with before taking office if said politician was involved in any legislation that would directly or indirectly benefit said company from his/or her  vote. I also believe that each politician should be limited to how much he/or she can spend getting elected. Any surplus funds donated to a campaign will go into a fund that helps pay for office personnel or other costs of running the government in Washington. We now will have people in Washington who are not going to be worried about being re-elected, who are not beholden to anyone, so they should be able to vote intelligently instead of spending their entire career name calling and playing the blame game.

If we as voters want to be taken seriously, then we have to have serious reasons, backed up by fact, not fiction, or politicians will never take us seriously, and even worse neither will our constituents. Most requests claim that politicians can serve one term and get retirement at whatever their full wage came to. As is shown above this is not true. As I stated, I do not believe politicians should get any retirement from service as our representative to Washington, but we have to be careful to post facts not fiction or we become the fairy tale of the Boy Who Cried Wolf!

  1. James Mahon says:

    Nicely done.

    Concerning a 28th amendment, I’m not sure attempting to change how Congress works would accomplish anything. For example, Congress is required by law to pass a budget each year, and that seems pretty well ignored. Perhaps I am a little too disillusioned, but it seems by some of the polls, I am not alone. I have no idea how many other laws are bent, or ignored. However, if the amendment centered on elections by getting rid of the electoral college, requiring a resume with a full disclosure of all the facts contained in the resume, and limiting the campaigns to what media would provide for free such as the debates, then perhaps politics could be less shady than they now seem to be. Hopefully then the candidates could work for Americans instead of their Political Party or the Special Interest Groups that funded their campaign. I’m sure some of the rules concerning lobbying and such would still be bent, but as you have championed, something needs to be changed.

    I’m sure you have noticed that some of my thoughts concerning Politics and Politicians have changed, but time pondering have brought on the changes. I sure that tomorrow will bring more changes; time does have a way of doing that. I am thinking very seriously on trying to start a grassroots campaign to get rid of the Electoral College. Not real sure I have the ability, but the need is great.

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