Dear Jon: Retirement benefits for Congress not as glamorous as many believe
Updated On: Jan 20 2014 06:33:58 PM CST
If you believe everything you read on the web members of Congress are financially set for life the minute they're elected. Lots of misinformation has created a controversy over just what benefits our elected leaders get. Gordon asks via email, "Dear Jon is it true that Congress has a pension plan, which provides full salary upon retirement, even if they serve only one term?"
I suspect this question continues to come up as lawmakers' approval ratings are historically low and given the recent government shutdown, there's no love lost between Americans and their elected leaders in Washington. The fact of the matter is members of Congress can't serve one term and collect a lifetime paycheck with free health care.
My congressional source in Washington tells me that members of Congress contribute to Social Security and to their own retirement plans. When they retire, the amount of their benefits is based on several factors, including years of service, age they begin drawing retirement benefits and the amount they contributed into the plan. It's the same formula as for all other Americans. To be vested in the retirement options, a member needs to serve at least five years.
Health care is part of that retirement plan, but under the Affordable Care Act a member must use the health care exchanges while serving, upon retirement members of Congress return to the federal employee pool and then purchase their insurance from the various options available to all federal employees.
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