Members of Congress and their staffs come and go. Have you ever wondered how their annuities are calculated? If you have, you’re not alone. That’s a question I frequently get. So I thought I’d share the answer with you.
CSRS. The formula used for Members and staff is as follows:
2.5 percent x highest three consecutive years of average salary (the high-3) x the number of years of Member or staff service, which can’t be fewer than five.
In addition, a maximum of five years of military service – for which he or she is not receiving retired pay – may also be computed at 2.5 percent, with all other years of military service computed at 2 percent. Note: To get credit for periods of military service, a deposit to the retirement fund may be required. The rules are the same for Members and staff as they are for most other employees.
All non-Member and staff service is computed using the standard CSRS formula. The final annuity cannot exceed 80 percent of the final salary.
FERS. The formula looks like this:
1.7 percent x high-3 x years of Member or staff service, which must be at least five years and not more than 20.
Any service over 20 years is computed at 1 percent, as is military service, for which a deposit is mandatory, just as it is for most other employees.
All non-Member or staff service is computed using the standard FERS formula.
By now, you’ve probably come to a slow boil because you’ve been doing some quick arithmetic and concluded that Congressional Members and staff are fleecing the government. Not so fast. Most of them – especially staffers – have far shorter work histories in government than do career employees. In addition, they have to pay more than you do to get these enhanced benefits. Under CSRS, Members have to contribute 8.5 percent of their salary, staffers 8 percent. Under FERS, it’s 1.3 percent for both.
