Lawmaker Pensions

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Lawmaker Pensions

Postby sean_czarniecki on Mon Nov 13, 2006 7:42 am

Generous pension plan puts extra shine on federal lawmakers' golden years
By EVAN LEHMANN, Sun Washington Bureau
Lowell Sun
Article Last Updated:11/12/2006 06:44:12 AM EST

WASHINGTON -- Congressional perks have long stoked comparisons between lawmakers and the citizens who pay for them -- things like free haircuts for senators, airline tickets billed to constituents, and reserved parking stalls at Washington airports.

But perhaps the most valuable benefit for elected officials comes after they've left Capitol Hill -- lifelong pensions amounting to millions of dollars every year.

The federal pension system predates Social Security and was created in 1920 for the president and his cabinet. It was extended to Congress in 1942, then repealed for several years due to "adverse public opinion," according to a government report.

"It's kind of ironic that after 60 years lawmakers have not a learned a single lesson about why people are ticked off about this issue," said Pete Sepp of the National Taxpayers Union, which has worked to reduce the cost of congressional pensions.

Questions have lingered for decades about "the generosity of these plans," he added.

Several Massachusetts lawmakers could begin drawing a pension next year, amounting to $418,000 annually, according to estimates by the National Taxpayers Union.

Sen. Edward Kennedy and Rep. Edward Markey, the delegation's longest-serving lawmakers, each would be eligible for annual payments of $119,000. Sen. John Kerry could collect $59,000 beginning in 2008, and Reps. John Olver and William Delahunt could draw $35,000 and $27,000, respectfully, beginning in January.

Lawmakers are eligible for different pension programs, depending on when they were elected. They also pay into Social Security. Lawmakers' pensions are not publicly available. The National Taxpayers Union forecasts the payments using several factors, including age, length of federal service, and salary.

The group, which lobbies Congress for limited government and low taxes, calculates that Lowell Rep. Marty Meehan, 49, could begin collecting $39,000 when he turns 62, if he retired this year. His annual pension will continue to increase the longer he remains in Congress.

While lawmakers are collecting handsome retirement accounts, surpassing those received by many private executives and federal employees, American workers are seeing traditional pensions disappear.

In 1991, 43 percent of American workers in private companies and local government were receiving pensions from their employers. By 1999, that number had dropped to 30 percent, according to the U.S. Department of Labor.

Today in New England, 20 percent of workers in private companies are offered pensions, marking a movement toward the less-volatile 401(k) plans that are provided to 53 percent of workers in the Northeast.

Kerry said in a statement that the "pension crisis is a ticking time bomb for millions of families. The fact that millions of working Americans go without basic benefits is wrong," he added. "Jobs should come with health care and pensions."

A spokeswoman for Olver, an Amherst Democrat whose district includes Pepperell and Townsend, said "much more needs to be done to increase retirement security for Americans," including staving off Republican attempts to overhaul Social Security and preventing companies from diminishing, or jettisoning, pension programs.

One of the state's top future beneficiaries of the congressional pension -- Kennedy -- helped design legislation this summer aimed to help prepare American workers for retirement.

The Pension Protection Act is intended to strengthen employee retirement accounts by automatically enrolling workers into 401(k) plans and simplifying the ability of companies and employees to manage their accounts.

Autopilot enrollment significantly increases employee participation in the plans, according to a study by Hewitt Associates. The group found that 90 percent of workers participated in the investment plans if their company automatically enrolled them, compared to 68 percent who work for companies that don't.

"Sen. Kennedy has spent his career fighting for the rights of working Americans," said his spokeswoman, Melissa Wagoner.

But he and his colleagues have also spent years in a Congress that raises its members' pension benefits every year.

Unlike private pension plans, retired lawmakers see their annual pension payment increase every year -- a cost-of-living adjustment that will propel their earnings upward by thousands of dollars.

Lawmakers don't have to enroll in the program.

"I did think when I signed up it was too generous and I was uncomfortable with it," said Rep. Barney Frank, a Newton Democrat who is not enrolled in the pension plan.

Frank said he was concerned that accepting the retirement perk would provide a "point of vulnerability" for criticism by the press. He plans to fund his retirement through public speaking and writing books.

The benefit is larger than those received by other federal employees -- and most private pensions, critics say. The pension plans are based on the theory that lawmakers could be ousted from office in re-election, thereby giving them a relatively short career and smaller pensions.

For example, a lawmaker with 20 years of service can retire at age 50 with a full pension. Other federal employees with the same length of service must wait until they are 60 to retire.

"It's more generous in every instance," said Sepp, of the National Taxpayers Union. "That's the difference between going onto a lucrative second career and probably just settling into old age."

Evan Lehmann's e-mail address is elehmann@lowellsun.com.
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Lawmaker Pensions

Postby Harry on Thu Nov 16, 2006 7:39 am

Right on, nothing personal, straight talk on what's just down the road regarding the taxpayer funded public pension debacle that every city and state in America is up against.

http://themessthatgreenspanmade.blogspot.com/2006/10/public-pension-backlash.html
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