What Congress Gets

You may have received an email recently from someone who is trying to start a petition to get members of Congress to pay into Social Security like other Americans. Or maybe you've gotten the one that says members of Congress receive their congressional salary for the rest of their lives after serving. In general, these messages tend to confuse fiction with fact.

On Jan. 7, the Congressional Research Service released the latest version of a report it regularly updates on the status of retirement benefits for members of Congress. Here are some of its highlights:

• Members of Congress who were elected prior to 1984 did not pay into Social Security since all federal employees were exempt from Social Security. These members were covered under the Civil Service Retirement System. They had the choice to continue paying into Social Security and CSRS since they might not be able to complete a career of federal service if not reelected. These members also could choose to decline CSRS coverage for the same reason.
• Members of Congress elected after 1983 were covered by Social Security and also by the Federal Employees Retirement System. They are under the same rules for retirement coverage as other federal employees hired after 1983. Until 2003, members could decline coverage under FERS. But a change in law removes this option for members elected on or after Sept. 30, 2003.
• It takes a minimum of five years of civilian service for any federal employee to qualify for an optional (as opposed to disability) retirement benefit. This is no different for members of Congress. All federal employees can apply for a retirement benefit at age 62 with a minimum of five years of civilian federal service.
• Members are eligible for a pension at age 50 if they have completed 20 years of service, or at any age after 25 years of service. The amount of their pensions depends on years of service and the average of their highest three years of salary.
• As of Oct. 1, 2009, 455 retired members of Congress were receiving federal pensions based on their congressional service. Of that number, 275 had retired under CSRS and were receiving an average annual pension of $69,012. A total of 180 members had retired with service under both CSRS and FERS or with service under FERS only. Their average annual pension was $40,140 in 2009.

So what's the difference between congressional retirement benefits and those for most other federal employees? CSRS puts it this way: "Because of the uncertain tenure of congressional service, FERS was designed, as CSRS had been, to provide a larger benefit for each year of service to members of Congress and congressional staff than to most other federal employees. Members of Congress also become eligible for retirement annuities under CSRS and FERS at an earlier age and with fewer years of service than most other federal employees. However, members of Congress and congressional staff pay a higher percentage of salary for their retirement benefits than do most other federal employees."

Special Groups Under CSRS

While we're on the subject of special retirement benefits, I received some feedback on last week's column about options for law enforcement officers and firefighters under FERS. Several people noted that there are still some employees in these groups who are covered under CSRS. Let's take a quick look at their benefits.

If you are a law enforcement officer or firefighter covered under CSRS, you probably were hired into a civilian federal job before 1984. This also means that most likely, you have at least 27 years of service and are at least 48 years old. Some of you might have another nine years to go before you reach mandatory retirement at 57. As with the FERS system, there are some exceptions to the mandatory retirement age if an officer or firefighter has not completed 20 years of covered service by the mandatory age, but most agencies would not hire an employee into one of these positions past age 37, so that doesn't come into play very often.

The minimum eligibility requirements for retirement under CSRS special provisions are age 50 with 20 years of covered service. CSRS, unlike FERS, does not include an option to retire with 25 years of service at any age. (For full details, see Chapter 46 of the Office of Personnel Management's CSRS and FERS Handbook.)

For CSRS law enforcement officers and firefighters, retirement is computed as follows:

2.5% x high-three average salary x 20 years of covered service + 2% x high three x remaining years and months of service.

There is a maximum CSRS benefit of 80 percent of the high three that is achieved after 35 years of service under these special provisions. Sick leave can be credited above the 80 percent in the amount that the employee has on the books on the date of retirement. After 35 years of service it is possible to have earned up to one year and nine months of sick leave since it accrues at the rate of 104 hours per year. One year of sick leave would be worth an additional 2 percent of the high-three average salary.

Military service can be included in the total service, but not counted toward the minimum 20 years of covered service, with certain exceptions.

Like law enforcement officers and firefighters employees under FERS, those under CSRS can move out of a covered position after 20 years and retain their rights to the liberalized computation of benefits. They then would no longer be subject to mandatory separation. If an employee has some law enforcement or firefighter service, but does not complete the minimum 20-year requirement or leaves federal service prior to age 50, then all service is computed under the general CSRS formula.

Also, since these employees are exempt from Social Security during their federal careers, they could be subject to the Windfall Elimination Provision and the Government Pension Offset, the same as other CSRS retirees.

Tammy Flanagan is the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars. She has spent 25 years helping federal employees take charge of their retirement by understanding their benefits.

For more retirement planning help, tune in to "For Your Benefit," presented by the National Institute of Transition Planning Inc. live on Monday mornings at 10 a.m. ET on federalnewsradio.com or on WFED AM 1500 in the Washington metro area.