Filner's "Fall from Grace" Cushioned by Federal Taxpayer-Backed Pension - as Much as $59K per-year, $1.19 Million Lifetime

(Alexandria, VA) – If the rest of America thought the scandal and resignation of San Diego Mayor Bob Filner was just a concern for Southern California, they are in for a costly wake-up call: According to National Taxpayers Union (NTU) estimates, the former Congressman could eligible for a federal pension payment of just under $59,000 his first year out of Washington, thanks to his near-20 years of service as a U.S. lawmaker.

NTU calculates that Filner’s pension for the full year 2013 would be as high as $58,909. However, the actual amount he receives could be lower, depending on the court-ordered financial terms of his last divorce. For example, if the court ordered a standard survivor annuity that would allow Filner’s last former spouse to collect part of his pension benefit after he died, the pension would be reduced to $53,018.

Potentially, Filner could collect as much as $1.19 million over his lifetime, should he survive to the age of 85.9 years and receive Cost of Living Adjustments of 2.4 percent each year (assumptions are based on mortality tables used by the life insurance industry and projections that federal actuaries use for retirement systems). Under the reduced $53,018 scenario above, the lifetime pension amount would likewise be somewhat smaller, at $1.07 million. These estimates do not include any benefits to which Filner would be entitled from service at other levels of government.

NTU Executive Vice President Pete Sepp said, “After a career spending taxpayer dollars in Congress, and as Mayor of San Diego, Bob Filner will serve as the latest example of a politician who falls from grace but can still manage to land on his feet.”

Lawmakers can also avail themselves of the federal Thrift Savings Plan (TSP), which functions much like a private-sector 401(k) arrangement. For those Members of Congress first elected in 1984 and thereafter, a government “match” of up to five percent of salary contributions is provided. If Filner had contributed the maximum amount permissible (with salary matches) and invested his contributions in TSP’s best-performing fund mix at the highest amounts permissible under plan rules, he could have amassed a nest egg of more than $398,000 by the end of July. This is a hypothetical illustration; Filner’s actual decisions concerning TSP are not known. 

Owing to ethical lapses of lawmakers, in 2007 and 2012 Congress approved reforms that could strip Senators and Representatives of their pensions if they committed serious felonies, mostly relating to financial misdeeds in office.  None of these statutes would affect Filner’s eligibility for his pension.

Members of Congress first elected 1984 and thereafter generally participate in the Federal Employees Retirement System (FERS). Last year, Congress moved to equalize its own pension benefit formula with that of rank-and-file federal employees (and raise the contribution rate as well). However, this formula mostly applies to lawmakers who won their first term in 2012 (and beyond); Rep. Filner would be grandfathered under the previous FERS calculation that was a cut above the one for most federal workers. 

Congressional pensions are typically 2-3 times more generous than those offered to similarly-salaried workers in the private sector (whose plans rarely offer regular COLAs). Lawmakers in under the previous FERS formula paid 1.3 percent of their salaries toward the Congressional retirement benefit, but this covers just a small portion of an average payout (they also pay into and collect Social Security).

NTU computes the pension benefit amounts based on public records concerning length of federal service, current age, life expectancy based on standard mortality tables used by the life insurance industry, and COLAs averaged at 2.4 percent a year, a figure federal actuaries have used in the past for projecting costs of the Federal Employees Retirement System (which contains one of Congress’s two pension plans). 

The 362,000-member NTU is a nonprofit citizen group founded in 1969 to work for lower taxes, smaller government, and accountability from public officials at all levels. For comment, or interview, contact Doug Kellogg at (703) 299-8698.