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How Much Retirement Is Paid to Our Congress?

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Every American is responsible for providing for his or her own retirement, but it often seems as though our retirement incomes are dependent on the whims of others — namely, lawmakers in state capitals and, even more, in Washington, D.C. Congressional debate surfaces on a regular basis on the future of the Social Security system, namely whether current funding levels will be sufficient to keep the system solvent in future decades.

Talk of privatizing Social Security and other radical measures has mostly ebbed since the economic meltdown and stock market crash of 2008-2009. Nevertheless, the thought that the future of Social Security — the primary source of income for millions of American retirees — is in the hands of a roomful of aging men and women, is a sobering one.

How Much Retirement Is Paid to Our Congress?

401(k) Plans


Likewise, federal legislators largely determine the rules governing retirement savings accounts such as Individual Retirement Accounts (IRAs) and 401(k) plans. Contribution limits, withdrawal restrictions and requirements, and the taxation of these accounts are all determined by legislation. Although the lawmakers who debate and draft regulations are generally well-versed in these complex topics and have the best interests of their constituents at heart, at the same time there can be much to criticize in how they manage those parts of our retirement income that they are able to control.

How about the legislators’ own retirement plans? Do lawmakers take better care of themselves than of their constituents? How much retirement is paid to our Congress?

As federal employees, members of Congress, both senators and representatives, receive retirement benefit under the same plans available to all other federal employees. To receive retirement benefits, a Congress member must have served at least five years. Those elected since 1984 are covered by the Federal Employees’ Retirement System (FERS); those elected prior to 1984 are covered by the Civil Service Retirement System (CSRS), although in 1984 Congress members were given the option of sticking with the old retirement plan or converting to the new one.

Congressional retirement benefits are funded by taxes and by participant contributions, as is the case with all federal employees. Participants in the by-now predominant FERS plan pay 1.3 percent of their salaries directly into that plan, and another 6.2 percent of their salaries into the Social Security trust fund. All Americans, indeed, pay the same 6.2 percent to Social Security. Members are eligible for a pension at the age of 50, if they’ve served for twenty years. Any member of Congress who has served for twenty-five years, or who is aged 62 or more (and has served at least five years), is eligible to receive a pension.

The amount of the pension depends on years of service and the average of the highest three years of salary — the same as with all other federal employees. The initial amount of a Congress member’s pension cannot exceed 80 percent of his or her final salary.

As of 2006, 413 retired members of Congress were receiving federal benefits under the two retirement plans. The 290 retirees under the CSRS plan were receiving an average annual pension of $60,972. The remaining 123 members, under the FERS plan, were receiving an average annual pension of $35,952.

The annual salary of rank-and-file members of Congress, whether senators or representatives, is $174,000 (as of 2011-2012). Most of these men and women are otherwise wealthy, whether from business or professional earnings in other fields or through their families, and some indeed turn down their federal salaries. Most are capable of earning far more than their congressional salaries; however cynical one is about Washington legislators, they are indeed engaged in public service, which nearly always pays less than an equivalent level of work in the private sector. And, as with public service around the world, a lower level of compensation is at least partially made up for with increased benefits. All things considered, the average annual retirement pay of $60,000 under CSRS (or $35,000 under FERS) is not excessive.