It's A Gray Area: Federal pensions no longer make any sense

There is a lot of misinformation and mystery about the compensation Congress receives.

So I did some research at and called the Office of the Clerk of the House of Representatives at (202) 225-7000.

Senators and representatives receive an annual salary of $174,000, with the exception of the speaker, who is paid $223,500, and the Senate majority and minority leaders, who each receive $193,400. But those amounts are also subject to a cost-of-living increase each year, unless Congress votes to forgo that benefit.

Before 1984, neither members of Congress nor any other federal employees were required to pay into Social Security. And they couldn't receive payments either. But that changed with the passage of the Federal Employees Retirement System, which requires all federal employees to pay 6.2% of their salary into Social Security. In addition, members are required to contribute 1.3% of their salary to their own federal pension account.

For all federal employees, pensions vest after five years of service, and the maximum pension is capped at 80% of the average of their highest three years of salary.

Previous federal civilian and military service is tacked on to calculate how long a Congress member has served. To collect pension benefits, a member of Congress must be 62 — or 50 with 20 years of service, or any age with 25 years of service.

In 2006, 290 former members were receiving pension payments under the Civil Service Retirement System, the program used before the 1984 changes. Their average compensation was $60,972 per year. As best as I could determine, the formula for those members with 22 years of service entitled them to receive 55% of the average of their top three wage-earning years.

The average for the 123 former members who joined the program after the 1984 changes was $35,952 per year, and, as best as I could determine, 22 years of service entitled them to 36% of that same salary average.

Members may also receive outside income of up to $26,550 per year, but there are no limits for income from investments. However, members are not allowed to receive an honorarium for any speaking appearances. They may also make contributions to a 401(k) program, but there is no matching contribution by the government.

Contrary to rumor, members are not excluded from the provisions of the so-called Affordable Care Act, so they will have the same issues with its provisions that the rest of us have. And members do not receive a per diem, housing allowance, vacation pay or, unlike California's legislators, a car allowance.

But each member of Congress does receive three different types of allotments for expenses.

The first is for personal expenses, which must be accounted for each quarter. The same amount is received by each member. I was not able to discover how much that is, since it was not on any website I found, and no one in the Office of the Clerk seemed to know.

The second is for sending mail to constituents.

And the third is for office expenses, which consist of the leasing of an office in their districts, the salaries for staffs in their Washington and local offices, and the cost of travel to and from Washington. As to staffing, each member is restricted to no more than 18 full- and four part-time assistants, with a maximum salary of $168,411 for any staff member.

None of these expenses may be used for election campaigns, and, similarly, no campaign donations may be used to augment the expense allotments.

Each member is also entitled to travel on "fact-finding" trips abroad. But those expenses must be approved by the chair of the committee for which the travel is relevant, and at least one member of each political party must be included in the trip.

Looking back to the Constitutional Convention, Benjamin Franklin considered proposing that no elected government officials receive any salary at all for their service, but he could not gain sufficient support for that proposal so it was dropped. Nevertheless, almost none of the founding fathers contemplated that government service would become a profession. Instead it was anticipated that people would perform their service in office for a fairly short time, and then return to private life.

Unfortunately, in many ways since that time, both federal and state employees have become a privileged class. For example, very few people today in the private sector receive pensions. Instead they provide for their own retirement through their own 401(k) programs, with or without help from their employers.

I believe the founding fathers would have favored the same system today for government workers, and so do I.

Some people feel that it is hypocritical for me, as a retired judge who receives a pension from the state, to argue against public pensions. However, these programs were initiated years ago to compensate for the fact that the average salaries for government employees were then appreciably below their counterparts in the private sector.

So retirement pensions were used as an incentive to attract competent and dedicated workers. But that situation has changed, in that now most government employees receive salaries that are fully competitive with those in the private sector.

Furthermore, many governments in our country are bankrupt because they have more future financial obligations for these pensions than they will have income. Accordingly, it is time for the members of Congress to lead the way back to financial solvency and responsibility and vote to terminate all further retirement pensions for new federal employees, including their own ranks.

The financial security of our children, grandchildren and country depends on it.

JAMES P. GRAY is a retired Orange County Superior Court judge. He lives in Newport Beach. He can be contacted at

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