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Speaking Frank-ly on Pensions
December 7, 2011
Massachusetts Congressman Barney Frank’s retirement announcement is now more than a week old, but the speculation continues – some of it terribly misinformed – over the taxpayer-subsidized retirement package he might qualify to receive.
Since NTU is often a go-to source in the media for information on Congressional pay and perks, we’ve already been asked to crunch the numbers several times. Our best estimate: Congressman Frank could qualify for a pension starting in 2013 of as much as $139,000. Subsequent cost-of-living adjustments (COLAs) could make that figure higher in future years.
Because he was first elected before 1984, Congressman Frank has been eligible to participate in a special component of the Civil Service Retirement System (CSRS) that is more generous than the deal offered to most other federal employees. Lawmakers first elected after that point are enrolled in the Federal Employees Retirement System, (FERS) again with a formula that’s better than what rank-and-file federal workers get. Assuming Congressman Frank joined CSRS from the beginning of his service and stayed there, his 32 years in Congress would be sufficient to trigger a rule under the plan limiting the first year’s pension benefit to 80 percent of the lawmaker’s final salary. Again, however, the amount can grow with COLAs after 2013.
Congress’s pension arrangement is full of many wrinkles: enrollment was not mandatory for more senior Members, and it’s possible Frank might have switched into FERS during two “open season” periods. Hence our use of terms such as “qualifies,” “as much as” and “assuming.” Are we hedging too much? Unfortunately, we can’t know. The federal government has not provided data on the retirement amounts of individual lawmakers for more than two decades, having rejected our outfit’s Freedom of Information Act requests from back then. So, it’s up to NTU to provide calculations based on formulas for the plans and biographical information on Members of Congress.
Given the Congressional Research Service’s latest report on the number of lawmakers already on the retirement rolls, the Congressional pension scheme costs more than $25 million annually, only a fraction of which is covered by the lawmakers’ own contributions from their salaries (which taxpayers provide anyway). Congressman Frank – not to mention other retiring Members of both parties – will add to the cost. If we’d rather not see that bill climb even higher in future years, maybe we should embarrass lawmakers into picking up a different kind of bill – such as ones introduced this session to raise the Congressional retirement age or abolish the Congressional pension and allow federal legislators to participate only in a 401 (K)-style arrangement instead. Now, that would be leadership by example for a change.
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