When does a congressman's retirement kick in?

Answer 1

Members of Congress are eligible for the same retirement systems as regular federal employees. However, if they choose to participate, they pay more into the system and in return they get a slightly larger pension than most federal employees. They also get to take "discontinued service retirement" which leads to an immediate pension once their term expires, if they are eligible and do not return to Congress.

If the member of Congress began service before 1984, most likely they are covered by the Civil Service Retirement System, which provides a pension equal to 2.5% of his or her "high 3" salary (the average annual salary paid in the 3 years with the highest salaries) times the number of years of service. So a representative or senator with 10 years of service under this plan with a "high 3" of $150,000 would receive .025 x $150000 x 10 or $37,500 per year. If they're under 55, the amount is reduced by 2% for each year under 55. So in the example, if the retired congressman was only 50 when he left office, his pension would be reduced by 10% (55-50 = 5, 5 x 2% = 10%) permanently, so it would be $33,750. Regardless of how many years a congressman serves, the pension cannot be more than 80% of his or her salary (reached after 32 years of service).

If the member of Congress began service after 1983, they may elect to be covered under the Federal Employees Retirement System (and they also pay Social Security tax). FERS provides a pension of the "high 3" salary times 1.7% per year for the first 20 years of service and 1% per year for any years after 20. So if our congressman above was covered by FERS, his pension would be .017 x $150000 x 10 or $25,500 per year. There is no reduction for being under 55. There also is no cap on the percentage someone covered by FERS can earn because our congressman would have to work for 66 years to reach the 80% cap (20 years x .017 = .34; 46 years x .01 = .46; .34 + .46 = .80, or 80%; 20 years + 46 years = 66 years).