The Honorable Sherrod Brown
United States Senate
Washington, DC 20510
Dear Senator Brown:
On behalf of the
362,000-member National Taxpayers Union (NTU), I write to offer our strong
support for your legislation, S. 742, the Congressional Retirement Age Act of
2011. If enacted, your sensible bill would link the eligibility age of
defined-benefit pensions for Members of Congress to the retirement age for
Social Security.
NTU has long taken
an interest in reforming Congress’s retirement system, which is among the most
generous offered at any level of government. As a Congressional Research
Service (CRS) report from 1993 demonstrated, lawmakers could, under some
circumstances, enjoy a replacement rate of “high-three” salary averages that bested
those for a similarly-salaried executive branch employee, by 50 percent or
more. This difference aside, the very structure of the plan has incited the
public’s ire to a degree matched only by Congress’s provision for automatic
salary adjustments.
Over the past
several decades, we have advocated for policies such as limiting the
Congressional plan’s Cost of Living Adjustments, harmonizing the accrual rate of
the benefit formula with that of rank-and-file federal employees, or
eliminating the defined benefit portion altogether in favor of a modified
defined contribution arrangement under the federal Thrift Savings Plan (our
preferred option). Your legislation would approach reform in a novel and
commendable way, by setting a new retirement age for the system based on that
of Social Security’s. This one change, while seemingly small, would actually
make a great deal of progress toward the more equitable outcomes taxpayers seek.
Throughout its
institutional history of pursuing greater accountability for Congressional
perquisites, NTU has provided detailed projections of individual lawmakers’
retirement benefits as a public service, owing to federal officials’ refusal to
do so by invoking privacy concerns. During this time, we have discovered that
multi-million-dollar lifetime payouts for Members of Congress are not solely
the result of high accrual rates applied to extraordinary lengths of service.
In many cases, they are the product of an extremely lucrative early retirement
option. For example, although Executive Branch workers under the Federal
Employees Retirement System can look forward to an unreduced pension at age 60 after
20 years of service, Members of Congress may do so as early as age 50.
The time has come
for a substantial overhaul of the Congressional retirement package, and S. 742
is the ideal tool with which to begin the task. CRS estimated that at the
beginning of October 2009, defined benefit payments to former Senators and
Representatives would amount to more than $26 million for the year ahead. The
typical Congressional retiree’s lifetime payout far exceeds his or her
contributions into the plan, creating a significant subsidy from taxpayers –
many of whom, in turn, must fund their own retirements to a large degree. Your
legislation would help to relieve part of this burden, and provide
leadership-by-example on one of the most important issues facing America today:
retirement funding.
To be clear, NTU
believes that fundamental changes to Social Security are necessary for the
program’s (and the nation’s) future survival, including acceleration of the
retirement age, more realistic benefit-calculation processes, and
means-testing. Our members are also greatly concerned about the sustainability
of government employee retirement plans, and have been among the most vocal
proponents of introducing “pay up-front” defined contribution systems at the
state and local level. In our view such proposals (even in the presence of the
Thrift Savings Plan) deserve consideration at the federal level too.
We understand that
you may not share these goals, but whatever our respective aims may be, we can
agree that Congress should strengthen its fiscal and moral credibility with the
American people by bringing an appropriate measure of restraint to its own
retirement system. Likewise, we hope that all of your colleagues, regardless of
their philosophies toward Social Security and other government retirement
programs, can see the wisdom in cosponsoring and passing S. 742. You have
offered one of the few serious attempts to reform Congressional pensions in
recent memory, and our members look forward to helping you enact your
legislation in this session. A roll call vote in favor of the Congressional
Retirement Age Act of 2011 will be included as a pro-taxpayer vote in NTU’s
annual Rating of Congress.
Sincerely,
Pete Sepp
Executive Vice President
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