Retirement benefits for congress members are exaggerated
For a number of years, public opinion polls have indicated that the American public has a very low opinion of the U.S. Congress. Despite those low approval numbers, most Members are routinely returned to Congress by their constituents. That said, one of the recurring reasons for the public’s low opinion of congressional Members are emails and blog sites that allege that they receive their salary for life, tax free and with other benefits that other Americans don’t enjoy. As a former chief of staff to a U.S. Senator and a Member of Congress, I was asked about these issues many times. So let me try and set the record straight.
Members of Congress for purposes of retirement are part of the federal government employee retirement program like all other federal workers at all levels. This program is administered by the Office of Personnel Management (OPM). Members (and Senators) are also part of the Social Security system like all American workers. Each month they pay the FICA tax into the Social Security retirement system and are subject to all the rules in terms of age of retirement, benefits like all of us.
With regard to the federal “pension” program administered by OPM, all federal employees, including Members of Congress, must work for the federal government for at least five years before they vest in the program. Once vested, Members of Congress continue to pay a certain monthly amount into their retirement account. Their final retirement benefit is based on a percentage that is 2.5 percent times their years of service and an average of their last three years of federal service. Regular executive branch and military employees earn those years at a rate of 1.75 percent or 2.0 percent. This benefit, if taken, also reduces the amount of Social Security benefits they receive. In other words, they do not receive the full amount of both programs, they are off-set based on a formula.
Members of Congress cannot start taking their federal retirement until age 55, but then at a reduced amount. If they wait until age 65, they then receive benefits based on a formula that is the number of years served in government (includes all service including military and executive branch) times the percentage of the highest average of their last three years of salary ($174,00, which has been capped since January, 2009 and has stayed that way until 2017 despite many efforts by some Members to raise it in line with cost-of-living increases). That retirement benefit calculation is capped at 80 percent of the highest average salary of each Member. Only very senior Members of Congress ever reach that cap. Once received, the benefits at retirement are taxable to Members like all other ordinary income. There is no lifetime guarantee of their salary. The only federal employees with that benefit are federal judges who are appointed for life.
D. Eric Hultman served as chief of staff to U.S. Senator David Karnes (R-NE) and Congressman Lee Terry (R-NE) and now retired in Gulf Breeze.