Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
Before 1984, Members of Congress received pensions that were based upon the Civil Service Retirement System. This is the same system used by other Federal employees. Members of Congress did not participate in the Social Security system. They were not eligible for social security benefits based upon their pay as Members of Congress.
In 1983 Members of Congress and other federal employees, who were first hired after 1983, were integrated into the Social Security System. Starting in 1984 all Members of Congress started participating in the Social Security System regardless of when they first entered Congress. Only those on the federal payroll prior to 1984 continue to participate in the Civil Service Retirement System.
New Members of Congress since 1984 have participated in both Social Security and a new retirement program called the Federal Employees’ Retirement System. A Member of Congress can decline coverage in this program. Members elected prior to 1984 had the option of remaining on the Civil Service Retirement System or opting for the new Federal Employees Retirement System.
The Civil Service Retirement program was not designed to be integrated with Social Security. The contributions and benefits from this program are much higher. When these benefits are combined with Social Security they can become substantial.
Members of Congress can be covered under one of four different programs:
1. Full coverage under Social Security and the old Civil Service Retirement System.
2. An offset plan which includes both Social Security and the Civil Service Retirement System but the amount contributed to the CSRS is reduced by the amount paid into Social Security.
3. The Federal Retirement System and Social Security
4. Social Security alone.
The pensions for Members of Congress are financed through a combination of contributions from the Congressman and from the Federal Government—their employer. When they pay Social Security payroll taxes they pay the standard 6.2% required of other employees. If they remained in the Civil Service Retirement System they pay an additional 7% of their pay. If they opted for the Federal Retirement System they pay an additional .8% of their pay.
When they retire a Member of Congress can receive benefits in much the same way other federal employees do. They can file for and receive benefits under Social Security and they can apply for benefits under the retirement program they have adopted.
The retirement benefit itself is based upon reaching at least age 62 and is a function of years of service and income in the highest three years of covered salary. The benefit generated under the Civil Service Retirement System is much greater than the benefit under the Federal Retirement System. By law, the benefit paid to a Member of Congress cannot exceed eighty percent of the final pay of the Member of Congress.
There are around 500 Members of Congress drawing pensions today. Their average pension in 2006 was under $35,000. Members of Congress who elect an immediate annuity can also maintain the health insurance that they had as federal employees. Members of Congress that elect the FERS program are also eligible for a thrift savings program in which contributions are matched to a certain level.
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In 1983 Members of Congress and other federal employees, who were first hired after 1983, were integrated into the Social Security System. Starting in 1984 all Members of Congress started participating in the Social Security System regardless of when they first entered Congress. Only those on the federal payroll prior to 1984 continue to participate in the Civil Service Retirement System.
New Members of Congress since 1984 have participated in both Social Security and a new retirement program called the Federal Employees’ Retirement System. A Member of Congress can decline coverage in this program. Members elected prior to 1984 had the option of remaining on the Civil Service Retirement System or opting for the new Federal Employees Retirement System.
The Civil Service Retirement program was not designed to be integrated with Social Security. The contributions and benefits from this program are much higher. When these benefits are combined with Social Security they can become substantial.
Members of Congress can be covered under one of four different programs:
1. Full coverage under Social Security and the old Civil Service Retirement System.
2. An offset plan which includes both Social Security and the Civil Service Retirement System but the amount contributed to the CSRS is reduced by the amount paid into Social Security.
3. The Federal Retirement System and Social Security
4. Social Security alone.
The pensions for Members of Congress are financed through a combination of contributions from the Congressman and from the Federal Government—their employer. When they pay Social Security payroll taxes they pay the standard 6.2% required of other employees. If they remained in the Civil Service Retirement System they pay an additional 7% of their pay. If they opted for the Federal Retirement System they pay an additional .8% of their pay.
When they retire a Member of Congress can receive benefits in much the same way other federal employees do. They can file for and receive benefits under Social Security and they can apply for benefits under the retirement program they have adopted.
The retirement benefit itself is based upon reaching at least age 62 and is a function of years of service and income in the highest three years of covered salary. The benefit generated under the Civil Service Retirement System is much greater than the benefit under the Federal Retirement System. By law, the benefit paid to a Member of Congress cannot exceed eighty percent of the final pay of the Member of Congress.
There are around 500 Members of Congress drawing pensions today. Their average pension in 2006 was under $35,000. Members of Congress who elect an immediate annuity can also maintain the health insurance that they had as federal employees. Members of Congress that elect the FERS program are also eligible for a thrift savings program in which contributions are matched to a certain level.