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By: FEDweek StaffFollowing are key sections from a Congressional Research Service report comparing the retirement programs of federal employees and members of Congress.
Prior to 1984, neither federal civil service employees nor Members of Congress paid Social Security taxes, nor were they eligible for Social Security benefits. Members of Congress and other federal employees were instead covered by a separate pension plan called the Civil Service Retirement System (CSRS). The 1983 amendments to the Social Security Act (P.L. 98-21) required federal employees first hired after 1983 to participate in Social Security. These amendments also required all Members of Congress to participate in Social Security as of January 1, 1984, regardless of when they first entered Congress. Because CSRS was not designed to coordinate with Social Security, Congress directed the development of a new retirement plan for federal workers. The result was the Federal Employees’ Retirement System Act of 1986 (P.L. 99- 335).
Members of Congress first elected in 1984 or later are covered automatically under the Federal Employees’ Retirement System (FERS). All Senators and those Representatives serving as Members prior to September 30, 2003, may decline this coverage. Representatives entering office on or after September 30, 2003, cannot elect to be excluded from such coverage. Members who were already in Congress when Social Security coverage went into effect could either remain in CSRS or change their coverage to FERS. Members are now covered under one of four different retirement arrangements:
• CSRS and Social Security;
• The CSRS Offset plan, which includes both CSRS and Social Security, but with CSRS contributions and benefits reduced by Social Security contributions and benefits;
• FERS, which includes the FERS basic retirement annuity, Social Security, and Thrift Savings Plan (TSP); or
• Social Security alone.
. . . Because of the uncertain tenure of congressional service, FERS was originally designed, as CSRS had been, to provide a larger benefit for each year of service to Members of Congress and congressional staff than to most other federal employees. Prior to the Middle Class Tax Relief and Job Creation Act of 2012 (P.L. 112-96), all Members of Congress also became eligible for retirement annuities at an earlier age and with fewer years of service than most other federal employees. However, all Members of Congress and congressional staff also paid a higher percentage of salary for their retirement benefits than most other federal employees before P.L. 112-96 was enacted.
P.L. 112-96 made two significant changes to the retirement benefits of Members of Congress who are first covered by FERS after December 31, 2012.5 First, P.L. 112-96 decreased the FERS benefit accrual rate (used in the FERS pension calculation) for Members first covered by FERS (or reelected with less than five years of FERS service) after December 31, 2012, to be the same as regular FERS employees. Therefore, the larger benefit per year of service is no longer available to Members (or congressional employees) first covered by FERS after December 31, 2012.
Second, P.L. 112-96 also increased the FERS employee contributions by 1.8 percentage points for Members of Congress first covered by FERS (or reelected with less than five years of FERS service) after December 31, 2012. Therefore, Members newly covered by FERS in 2013 are required to contribute 3.1% of pay to FERS. Subsequent to P.L. 112-96, the Bipartisan Budget Act of 2013 (P.L. 113-67) further increased the FERS employee contributions by an additional 1.3 percentage points for all individuals, including Members of Congress, first covered by FERS (or rehired/reelected with less than five years of FERS service) after December 31, 2013. Therefore, under P.L. 113-67, Members of Congress and other federal employees first covered by FERS beginning in 2014 are required to contribute 4.4% of pay to FERS.
Thus, for individuals first covered by FERS after December 31, 2012, there is no longer a larger employee contribution under FERS required for Members and congressional employees in comparison with regular FERS employees; all of these groups contribute 3.1% of pay toward their FERS annuity if first covered in 2013 or 4.4% of pay if first covered by FERS after 2013. Members of Congress first elected after December 31, 2012, however, remain eligible for retirement annuities under FERS at earlier ages and with fewer years of service than most other federal employees.
There were 619 retired Members of Congress receiving federal pensions based fully or in part on their congressional service as of October 1, 2022. Of this number, 261 had retired under CSRS and 358 had retired under FERS. Members who had retired under CSRS had completed, on average, 24.7 years of civilian federal service. Their average annual CSRS annuity in 2022 was $84,504. Those who had retired under FERS had completed, on average, 16.2 years of civilian federal service. Their average retirement annuity in 2022 (not including Social Security) was $45,276. The average age of retired Members of Congress receiving retirement annuities in 2022 was 78 for those who had retired under CSRS and 75 for those who had retired under FERS.
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