Your congressman's padded retirement plan
By: David Freddoso

After serving 18 years in Congress, former Rep. William Jefferson of
Louisiana, a Democrat, will continue his service in a different federal
institution -- prison. He was sentenced recently to serve 13 years for

But his fellow prisoners will have to forgive Jefferson if he grins and
whistles as he stamps out license plates. That's because he is still
eligible for a guaranteed $50,000 pension in his first year of retirement,
which will increase each year thereafter with the cost of living.

Opinion polls show that Americans today have a special contempt for
Congress. They might be even more upset if they knew what kind of retirement
deal congressmen have given themselves at the taxpayers' expense. It's a
much better deal than the taxpayers are getting as they watch their
retirement savings collapse in the bear stock and real estate markets.

Congressmen who serve for at least five years get a very generous defined
benefit pension plan in retirement -- the kind that doesn't exist anymore in
the private sector because it's impossible to fund. It's far more generous
than that of even the longest-serving federal employees.

Members who took office before 1984 get the best deal -- a generous 2.5
percent of the average of their top three years' salary for each year of
service. Their total includes years of military and other government

Although the payout in the first year of retirement is limited to 80 percent
of their last year's salary, it grows automatically each year with the cost
of living. Appropriations Chairman David Obey, for example, could quit his
job this January and take home $139,200 in 2010. In a decade or so, with
cost-of-living adjustments, he could be making more than his current salary
of $174,000. He isn't the only one.

To get that kind of deal in retirement, you would need at least $2 million
in your 401(k) and a healthy bull market from now until you die.

In the 1980s, congressional pensions were reformed along with the rest of
the federal retirement system. That means that congressmen elected in 1984
and later don't get a deal quite so sweet. They take home 1.7 percent of
their "high three" for each of the first 20 years, and 1 percent for each
year thereafter.

But on top of their defined benefit plan, these newer members of Congress
still get the ordinary man's retirement -- a 5 percent match on
contributions to the Federal Thrift Savings Plan (much like a 401(k)), plus
Social Security.

The corrupt Jefferson is a special case. He can exploit a loophole in the
2007 law supposedly depriving corrupt members from taking home their
pensions. Because he took all of his bribes before the law was signed that

Jefferson might not be the last to find the loophole. In July 2007, the Wall
Street Journal reported that Republican Rep. Don Young of Alaska, was under
investigation for possibly taking unreported gifts from lobbyists up until

And Rep. Charlie Rangel, D-N.Y., has admitted to under-reporting his outside
income and assets on his congressional disclosure forms between 2002 and
2006, which could constitute perjury. (Rangel claims it was just an
oversight -- he forgot about millions of dollars in business transactions
over that period.)

If they ever face legal problems, both Rangel and Young have a strong case
for defending their pensions, based on the timing of any alleged wrongdoing.
Both of these very senior members of Congress are eligible for $139,200 in
their first year of retirement. (NOTE, Carlitos Rangel faces bigtime legal problems
now. Nailed or not, he'll keep the pirate booty. )

Even if we don't begrudge them their oversized paycheck, do our
congressmen -- even the bad ones -- deserve a retirement that is more than
twice as nice as most ordinary working people enjoy? Isn't there another
way to attract nicer people? Less mercenary?

David Freddoso is an editorial page staff writer who can be reached at

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