Congress passed a law in 1983 that required all members of Congress and the employees of Congress to pay into the Social Security system. This created a conflict because, at the time, members of Congress and the employees of Congress were covered by the Civil Service Retirement System and thus their retirement pension was calculated under a program that did not provide for Social Security benefits.
Congress then established the Federal Employee Retirement System (FERS) and beginning in 1987, all new federal employees had to contribute to FERS and their retirement benefits were calculated by FERS. Congressional personnel and employees had a similar FERS that will be referred to a C-FERS to note the differences.
FERS and the Congressional FERS
Under FERS, the pension of a federal employee is 1 percent of salary for each year of federal service and it is based on the average of the highest 36 months of federal pay. Those federal employees who serve the federal government for at least 20 years, and who are over the age of 62, have their pension increased to 1.1 percent of salary for each year of federal service. For a federal employee who has 30 years of service and meets one of four retirement requirements as published by OPM, the pension will be 30 percent of pay, unless the employee is 62 at time of retirement. Then the pension will be 33 percent of pay. For a full explanation of how FERS works, please see How the Federal Pension System Works.
The Congressional FERS or C-FERS is slightly different and more rewarding. Under C-FERS, the pension of a congressional employee, and this includes all members of Congress and those federal employees employed by Congress, is calculated at 1.7 percent of salary for the first 20 years of service and 1 percent for each year over 20 years of service. This can result in congressional staffers or a members of Congress, including senators, who have 30 years of congressional service, having a pension that is 44 percent of their highest pay averaged over 36 months.
The Pay and Retirement of Congressional Personnel
The pay for members of Congress is set to three different levels depending on position in the congressional system. For a regular congressman or senator, the pay is set at $174,000 annually. The majority and minority leaders of the House and Senate each receive $193,400 annually, while the Speaker of the House receives $223,500 annually. Annual increases are automatic and tied to the increase of the cost of living unless Congress passes legislation to defer the pay raise. Additionally, each member of Congress can refuse annual raises even if the rest of Congress accepts the annual raise, and there are several who do this because of campaign promises they made when running for office.
As an example, if Nancy Pelosi, the current (2010) Speaker of the House, elected to retire or was defeated in the 2010 elections, her retirement pension would be calculated using the following information. Ms. Pelosi entered service as a congresswoman in 1987 at mid-year as a result of a special election. If she retired at the end of 2010, she would have 22.5 years of service. Her first 20 years would be multiplied by 1.7 for a total of 34 percent. Then her years of service over twenty would add an additional 2.5 percent, for a grand total of 36.5 percent. Using $220,000 as the average for her highest 36 months would mean that her pension would be $80,300 annually or $6,691 monthly, before deductions.
Congressional Pay and Benefit Myths Dispelled
There are many myths regarding the pay and benefits of the nation’s Congress and Senate. In an effort to dispel some of these myths, the following is provided:
- Members of Congress do not receive free health care. They pay for it just like every other federal employee with the employer picking up the largest share, much like health care insurance in the private sector.
- Members of Congress do not receive their full salary for life. They must meet retirement eligibility requirements, but the minimum amount of time to earn a congressional pension is 5 years. The minimum age to collect such a pension is 50 years with 20 years of service, or at any age with 25 years of service.
- Congress does not vote for a raise each year. A previous Congress passed a law giving them automatic raises and now Congress must vote to skip the raise.
- Congress does not get a free pension. Each person under the congressional pension plan (C-FERS) must contribute 1.3 percent of pay. This is in contrast to a regular federal employee who contributes 1 percent of pay for FERS.
While the pay for a congressperson or senator may seem high – the pension could easily provide a modest standard of living for a middle class family – the congressional pension system is not as plush as many Americans believe. Careful research, and not believing every e-mail that should have been diverted to the Spam folder, will keep every American from believing the myths and other misinformation about America’s elected officials.
Mark Butler - Mark Butler is a Navy veteran and the author of The Coffee Break Guide for Veterans Seeking Federal Employment.
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