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Tweet[IWS] CRS: RETIREMENT BENEFITS FOR MEMBERS OF CONGRESS [19 March 2014]
IWS Documented News Service
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Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
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Congressional Research Service (CRS)
Retirement Benefits for Members of Congress
Katelin P. Isaacs, Analyst in Income Security
March 19, 2014
http://www.fas.org/sgp/crs/misc/RL30631.pdf
[full-text, 20 pages]
Summary
Prior to 1984, neither federal civil service employees nor Members of Congress paid Social
Security taxes, nor were they eligible for Social Security benefits. Members of Congress and
other federal employees were instead covered by a separate pension plan called the Civil Service
Retirement System (CSRS). The 1983 amendments to the Social Security Act (P.L. 98-21)
required federal employees first hired after 1983 to participate in Social Security. These
amendments also required all Members of Congress to participate in Social Security as of January
1, 1984, regardless of when they first entered Congress. Because CSRS was not designed to
coordinate with Social Security, Congress directed the development of a new retirement plan for
federal workers. The result was the Federal Employees’ Retirement System Act of 1986 (P.L. 99-
335).
Members of Congress first elected in 1984 or later are covered automatically under the Federal
Employees’ Retirement System (FERS). All Senators and those Representatives serving as
Members prior to September 30, 2003, may decline this coverage. Representatives entering office
on or after September 30, 2003, cannot elect to be excluded from such coverage. Members who
were already in Congress when Social Security coverage went into effect could either remain in
CSRS or change their coverage to FERS. Members are now covered under one of four different
retirement arrangements:
• CSRS and Social Security;
• The “CSRS Offset” plan, which includes both CSRS and Social Security, but with CSRS contributions and benefits reduced by Social Security contributions and benefits;
• FERS and Social Security; or
• Social Security alone.
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% of the Social Security taxable wage base ($117,000 in 2014). Members first
covered by FERS prior to 2013 also pay 1.3% of full salary to the Civil Service Retirement and
Disability Fund (CSRDF). Members of Congress first covered by FERS in 2013 contribute 3.1%
of pay to the CSRDF. Members of Congress first covered by FERS after 2013 contribute 4.4% of
pay to the CSRDF. In 2014, Members covered by CSRS Offset pay 1.8% of the first $117,000 of
salary, and 8.0% of salary above this amount, into the CSRDF.
Under both CSRS and FERS, Members of Congress are eligible for a pension at the age of 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% of his
or her final salary.
There were 527 retired Members of Congress receiving federal pensions based fully or in part on
their congressional service as of October 1, 2012. Of this number, 312 had retired under CSRS
and were receiving an average annual pension of $71,472. A total of 215 Members had retired
with service under FERS and were receiving an average annual pension of $40,560 in 2012.
Contents
Background on Congressional Pensions .......................................................................................... 1
Retirement Plans Available to Members of Congress ...................................................................... 3
Members First Elected Before 1984 .......................................................................................... 3
Members First Elected Since 1984 ............................................................................................ 3
Age and Length-of-Service Requirements....................................................................................... 4
Retirement Under CSRS ............................................................................................................ 4
Retirement Under FERS ............................................................................................................ 5
Coordination of FERS Benefits with Social Security................................................................ 5
Social Security Retirement Benefits .......................................................................................... 6
Social Security Earnings Limit .................................................................................................. 6
The Thrift Savings Plan: An Integral Component of FERS ...................................................... 7
Required Contributions to Retirement Programs ............................................................................. 7
Total Payroll Deductions ........................................................................................................... 9
Pension Plan Benefit Formulas ........................................................................................................ 9
Pension Benefits Under CSRS ................................................................................................ 10
Pension Benefits Under FERS ................................................................................................. 10
Social Security Benefits .......................................................................................................... 11
Pensions for Members with Service Under Both CSRS and FERS ............................................... 12
Retirement Benefits Under the CSRS Offset Plan ......................................................................... 12
Replacement Rates ......................................................................................................................... 13
Cost-of-Living Adjustments .................................................................................................... 13
The Thrift Savings Plan ................................................................................................................. 14
Mandatory Coverage Under FERS ................................................................................................ 15
Retirement Benefits for Members with Limited Service ............................................................... 15
Forfeiture of Annuity ..................................................................................................................... 16
Tables
Table 1. Annuity Replacement Rates for Members ....................................................................... 13
Contacts
Author Contact Information........................................................................................................... 17
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