The congress retirement plan

Answer 1

http://usgovinfo.about.com/library/weekly/aa031200a.htm

Congress: Rank-and-File Members' Salary

The current salary (2009) for rank-and-file members of the House and Senate is $174,000 per year. * Members are free to turn down pay increase and some choose to do so.

* In a complex system of calculations, administered by the Office of Personnel Management, congressional pay rates also affect the salaries for federal judges and other senior government executives.

* During the Constitutional Convention, Benjamin Franklin considered proposing that elected government officials not be paid for their service. Other Founding Fathers, however, decided otherwise.

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* From 1789 to 1855, members of Congress received only a per diem (daily payment) of $6.00 while in session, except for a period from December 1815 to March 1817, when they received $1,500 a year. Members began receiving an annual salary in 1855, when they were paid $3,000 per year. Congress: Leadership Members' Salary(2009)

Leaders of the House and Senate are paid a higher salary than rank-and-file members. Senate Leadership

Majority Leader - $193,400

Minority Leader - $193,400 House Leadership

Speaker of the House - $223,500

Majority Leader - $193,400

Minority Leader - $193,400 A cost-of-living-adjustment (COLA) increase takes effect annually unless Congress votes to not accept it. Congress: Benefits You may have read that Members of Congress do not pay into Social Security. Well, that's a myth. Prior to 1984, neither Members of Congress nor any other federal civil service employee paid Social Security taxes. Of course, the were also not eligible to receive 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 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 the 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. Members of Congress receive retirement and health benefits under the same plans available to other federal employees. They become vested after five years of full participation.

Members elected since 1984 are covered by the Federal Employees' Retirement System (FERS). Those elected prior to 1984 were covered by the Civil Service Retirement System (CSRS). In 1984 all members were given the option of remaining with CSRS or switching to FERS.

As it is for all other federal employees, congressional retirement is funded through taxes and the participants' contributions. Members of Congress under FERS contribute 1.3 percent of their salary into the FERS retirement plan and pay 6.2 percent of their salary in Social Security taxes. Members of Congress are not eligible for a pension until they reach the age of 50, but only if they've completed 20 years of service. Members are eligible at any age after completing 25 years of service or after they reach the age of 62. Please also note that Member's of Congress have to serve at least 5 years to even receive a pension. The amount of a Congressperson's pension depends on the years of service and the average of the highest 3 years of his or her salary. By law, the starting amount of a Member's retirement annuity may not exceed 80% of his or her final salary. According to the Congressional Research Service, 413 retired Members of Congress were receiving federal pensions based fully or in part on their congressional service as of Oct. 1, 2006. Of this number, 290 had retired under CSRS and were receiving an average annual pension of $60,972. A total of 123 Members had retired with service under both CSRS and FERS or with service under FERS only. Their average annual pension was $35,952 in 2006.

Answer 2

The retirement plan for members of Congress is defined by the Federal Employees' Retirement System (FERS), which includes a pension that is based on years of service and average salary. Members contribute a percentage of their salary to the plan and are eligible for benefits after serving at least five years. The plan also includes options for Thrift Savings Plan (TSP) investments, similar to a 401(k) plan.