Some facts about congressional pensions

Thursday, April 8, 2010

A recent letter was absolutely wrong about congressional pensions. The letter claimed that members of Congress receive their full salary as a pension after two years of service. With an adequate foundation of facts, people are entitled to an opinion. But no one is entitled to make up the facts. The facts are at

Congressional pensions, like those of other federal employees, are financed through a combination of employee and employer contributions. All members pay Social Security payroll taxes equal to 6.2 percent of the Social Security taxable wage base ($97,500 in 2007). Members covered by the Federal Employees Retirement System also pay 1.3 percent of full salary to the Civil Service Retirement and Disability Fund. Members covered by CSRS offset pay 1.8 percent of the first $97,500 of salary, and 8 percent of salary above this amount, into the Civil Service Retirement and Disability Fund.

Under both CSRS and FERS, 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 and the average of the highest three years of salary. By law, the starting amount of a member's retirement annuity may not exceed 80 percent of his or her final salary.

Pension benefits under both CSRS and FERS are computed according to (1) the retiree's average annual salary for the three consecutive years of highest pay (known as "high-3" salary); (2) the number of years of service covered by the pension plan; and, (3) the "accrual rate" at which benefits accumulate for each year of service. The pension is the product of these factors, expressed as:

High-3 years of annual salary x years of service x accrual rate = pension

The accrual rate of pension benefits under CSRS for each year of congressional service covered by CSRS is 2.5 percent. Therefore, the CSRS pension equals:

High-3 years of salary x service x 0.025 = pension

After two years of service a member of Congress gets no pension. It took me about 15 seconds to find this information. But maybe the letter writer is happier in la-la land.

John L. Cook of Cape Girardeau is a lawyer.

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