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   Congress' pension: Nice and secure

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1/20/2006 12:00 pm

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News

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Entered 11/26/2008, Updated 11/26/2008

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CNN Money. An excerpt... "In the coming months, you are going to read a lot of stories on our site about pensions and attempts by Congress to "reform" the system. No doubt there will be a lot of sound bites from various Congress folk ... some "outraged" by the loss of pensions and others pointing to "economic reality" while professing sympathy for the working American. Amid all the hubbub, keep this in mind: Congress has a pension plan ... and it's not at risk. It's a fairly nice one, too. Not extravagant, but nice. Members are eligible to start collecting at age 62 if they have at least five years of service. If they have 20 years of service under their belt, they can retire at 50. With 25 years of service, they can retire any time. What they get depends on a formula based on years of service and average pay(natch, right?). So a congressman with 22 years of service and whose average salary for the top three years was $153,900 gets $84,645. A current congressman ending up with six years of service (it's two-year terms, after all) would get at least $16,503 (at age 62, of course). In actuality, the average congressional pension payment ranges between $41,000 and $55,000, based on 2002 data from the Congressional Research Service. Now, a retiring congressman isn't allowed to get more than 80 percent of their salary upon retirement. But after retiring, cost of living adjustments kick in, which can add substantially to the payment. Add it all together and the Congressional pension program is about two-to-three times more generous than the average corporate executive pension plan, according to the National Taxpayers Union. What did they pay in for this benefit? It's a little complicated, of course, because one kind of pension program applies to senators and representatives elected before 1984 and another applies to those elected after. The Congressional Research Service has a nice little explainer here, if you are a glutton for detail pu


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