Retirement Benefits for Members of Congress
Katelin P. Isaacs
Analyst in Income Security
January 5, 2012
Congressional Research Service
7-5700
www.crs.gov
RL30631
CRS Report for Congress
Pr
epared for Members and Committees of Congress

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Retirement Benefits for Members of Congress

Summary
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 and Social Security; or
• Social Security alone.
Congressional pensions, like those of other federal employees, are financed through a
combination of employee and employer contributions. All Members pay Social Security payroll
taxes as a percentage of the Social Security taxable wage base ($110,100 in 2012). These taxes
are 6.2% under permanent law, but 4.2% under temporary law (P.L. 111-312, as amended by P.L.
112-78). Members enrolled in FERS also pay 1.3% of full salary to the Civil Service Retirement
and Disability Fund. Currently, Members covered by CSRS Offset pay 1.8% of the first $110,100
of salary, and 6.0% of salary above this amount (8.0% under permanent law), into the Civil
Service Retirement and Disability Fund.
Under both CSRS and FERS, Members of Congress are eligible for a pension at the age of 62 if
they have completed at least five years of service. Members are eligible for a pension at age 50 if
they have completed 20 years of service, or at any age after completing 25 years of service. The
amount of the pension depends on years of service and the average of the highest three years of
salary. By law, the starting amount of a Member’s retirement annuity may not exceed 80% of his
or her final salary.
As of October 1, 2010, 443 retired Members of Congress were receiving federal pensions based
fully or in part on their congressional service. Of this number, 262 had retired under CSRS and
were receiving an average annual pension of $69,420. A total of 181 Members had retired with
service under FERS and were receiving an average annual pension of $38,460 in 2010.
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Contents
Background on Congressional Pensions.......................................................................................... 1
Retirement Plans Available to Members of Congress...................................................................... 2
Members First Elected Before 1984.......................................................................................... 2
Members First Elected Since 1984............................................................................................ 2
Age and Length-of-Service Requirements....................................................................................... 3
Retirement Under CSRS............................................................................................................ 3
Retirement Under FERS............................................................................................................ 4
Coordination of FERS Benefits with Social Security................................................................ 4
Social Security Retirement Benefits.......................................................................................... 5
Social Security Earnings Limit.................................................................................................. 5
The Thrift Savings Plan: An Integral Component of FERS ...................................................... 5
Required Contributions To Retirement Programs............................................................................ 6
Total Payroll Deductions ........................................................................................................... 7
Pension Plan Benefit Formulas........................................................................................................ 8
Pension Benefits Under CSRS .................................................................................................. 8
Pension Benefits Under FERS................................................................................................... 9
Social Security Benefits ............................................................................................................ 9
Pensions for Members with Service Under Both CSRS and FERS............................................... 10
Retirement Benefits Under the CSRS Offset Plan......................................................................... 10
Replacement Rates......................................................................................................................... 11
Cost-of-Living Adjustments .................................................................................................... 11
The Thrift Savings Plan ................................................................................................................. 12
Mandatory Coverage Under FERS ................................................................................................ 13
Retirement Benefits for Members with Limited Service............................................................... 13
Forfeiture of Annuity ..................................................................................................................... 14

Tables
Table 1. Annuity Replacement Rates for Members ....................................................................... 11

Contacts
Author Contact Information........................................................................................................... 15
Acknowledgments ......................................................................................................................... 15

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Retirement Benefits for Members of Congress

Background on Congressional Pensions
The Civil Service Retirement Act of 1920 (P.L. 66-215) established a pension system for federal
employees in the executive branch of government. Coverage under the Civil Service Retirement
System (CSRS) was extended to Congress in January 1942 by P.L. 77-411. That law was repealed
just two months later in response to adverse public opinion. In 1946, P.L. 79-601 again extended
CSRS coverage to Congress, at the option of Members, with higher contributions and greater
benefits than those applicable to regular federal employees. In reference to that legislation,
S.Rept. 79-1400 (May 31, 1946) stated that a retirement plan for Congress
would contribute to independence of thought and action, [be] an inducement for retirement
for those of retiring age or with other infirmities, [and] bring into the legislative service a
larger number of younger Members with fresh energy and new viewpoints concerning the
economic, social, and political problems of the Nation.
The Social Security Amendments of 1983 (P.L. 98-21) required all federal employees hired in
1984 or later to participate in Social Security.1 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. Requiring federal workers to participate in both CSRS and Social Security
would have duplicated some benefits and would have resulted in employee payroll deductions for
the two programs that would exceed 13% of pay under permanent law (and would exceed 11% of
pay under current, temporary law). After mandating Social Security coverage of new federal
employees beginning in 1984, Congress directed the development of a new retirement plan for
federal workers with Social Security coverage as its foundation. The result of this effort was the
Federal Employees’ Retirement System Act of 1986 (P.L. 99-335).
The Federal Employees’ Retirement System (FERS) went into effect in 1987, and employees first
hired in 1984 or later were automatically enrolled in this plan. Employees who had been in the
federal government before 1984 were given the option to remain in CSRS—without Social
Security coverage—or to switch to FERS. The options for Members of Congress differed from
those available to other federal employees because the 1983 amendments required all Members
of Congress to participate in Social Security. Members first elected in 1984 or later were given
the option to enroll in FERS as well as being covered by Social Security, or to be covered only by
Social Security. Members who had been in Congress before 1984 could elect to stay in CSRS in
addition to being covered by Social Security; to elect coverage under an “offset plan” that
integrates CSRS and Social Security; to elect coverage under FERS in addition to being covered
by Social Security; or to be covered only by Social Security.2
Because of the uncertain tenure of congressional service, FERS was 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. Members of Congress also become eligible for
retirement annuities under CSRS and FERS at an earlier age and with fewer years of service than
most other federal employees. However, Members of Congress and congressional staff pay a
higher percentage of salary for their retirement benefits than do most other federal employees.

1 The Social Security Act became law in 1935 and at that time covered only workers in the private sector.
2 Under the “Offset Plan,” payroll deductions go partly to Social Security and partly to the Civil Service Retirement and
Disability Fund. In retirement, the individual’s CSRS pension is reduced (“offset”) by the amount of his or her Social
Security benefit.
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As of October 1, 2010, 443 retired Members of Congress were receiving federal pensions based
fully or in part on their congressional service. Of this number, 262 had retired under CSRS and
181 has retired under FERS. Members who had retired under CSRS had completed, on average,
19.0 years of civilian federal service.3 Their average annual CSRS annuity in 2010 was $69,420.
Those who had retired under FERS had completed, on average, 15.2 years of civilian federal
service.4 Their average retirement annuity in 2010 (not including Social Security) was $38,460.
The average age of retired Members of Congress receiving retirement annuities in 2010 was 79
for those who had retired under CSRS and 70 for those who had retired under FERS.
Retirement Plans Available to Members of Congress
Members First Elected Before 1984
Members of Congress who were first elected before 1984 may be covered under one of four
retirement plans:
• Dual Coverage. This is full coverage by both CSRS and Social Security.
• CSRS Offset. This is coverage by CSRS and Social Security, but with CSRS
contributions and benefits reduced (“offset”) by the amount of Social Security
contributions and benefits.
• FERS. This is composed of the FERS basic annuity, Social Security, and the
Thrift Savings Plan (TSP).
• Social Security Only. This occurs if the Member declines other coverage.
Members and other federal employees who were covered under CSRS had the opportunity to
switch to FERS during two six-month “open seasons” in 1987 and 1998. In 1987, fewer than 5%
of eligible federal employees switched from CSRS to FERS, and in 1998 fewer than 1% of
eligible employees switched.
Members First Elected Since 1984
Members of Congress who were first elected in 1984 or later are covered automatically by the
Federal Employees’ Retirement System. Prior to the Legislative Branch Appropriations Act, 2004
(P.L. 108-83), all Members could decline this coverage. Effective with passage of P.L. 108-83,
however, Representatives entering office on or after September 30, 2003, may not elect to be
excluded from such coverage; although all Senators and those Representatives serving as
Members prior to September 30, 2003, continue to be able to decline this coverage.

3 The mean number of years of military service for retired Members of Congress receiving CSRS annuities in 2010 was
1.8.
4 The mean military service for retired Members of Congress receiving FERS annuities in 2010 was 1.0 years.
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FERS is composed of three elements:
• Social Security,
• the FERS basic annuity, a monthly pension based on years of service and the
average of the three highest consecutive years of basic pay,
• the Thrift Savings Plan (TSP), into which participants can deposit up to a
maximum of $17,000 in 2012. Their employing agency matches employee
contributions up to 5% of pay.
Members who enter Congress with at least five years of previous federal employment covered by
CSRS can choose to participate in the CSRS Offset Plan rather than FERS.
Age and Length-of-Service Requirements
Members become vested in (legally entitled to) a pension benefit under CSRS or FERS after five
years of service. The age and service requirements for retirement eligibility are determined by the
plan under which a Member is covered at the time of retirement, regardless of whether he or she
has previous service covered under a different plan.5 Depending on a Member’s age and years of
service, a pension can be taken immediately upon retirement or only on a deferred basis.
Likewise, the Member’s age and years of service, as well as the starting date of the annuity, will
determine whether he or she is eligible for a full pension or a reduced pension.
Retirement Under CSRS
Four retirement scenarios are possible for Members covered by CSRS or the CSRS Offset Plan.
Retirement with an immediate, full pension is available to Members aged 60 or older with
10 years of service in Congress, or aged 62 with five years of civilian federal service,
including service in Congress.
Retirement with an immediate, reduced pension is available to Members aged 55 to 59 with
at least 30 years of service. It is also allowed if the Member separates for a reason other than
resignation or expulsion after having completed 25 years of service, or after reaching the age
of 50 and with 20 years of service, or after having served in nine Congresses.6
Retirement with a deferred, full pension is available if the Member leaves Congress before
reaching the minimum age required to receive an immediate, unreduced pension and delays
receipt until reaching the age at which full benefits are paid. A full pension can be taken at the
age of 62 if the Member had five through nine years of federal service, or at the age of 60 if

5 Active-duty military service can be counted toward retirement eligibility, but not toward five-year vesting. In order
for military service to count toward the amount of one’s retirement annuity, the individual must deposit in the Civil
Service Retirement and Disability Fund the amount that would have been withheld if retirement deductions had been
made during the person’s years of military service, plus accrued interest on this amount.
6 The pension is reduced by one-twelfth of 1% for each month not in excess of 60 months, and one-sixth of 1% for each
month in excess of 60 months that the Member is under age 60 at the date of separation. Reasons for separation “other
than resignation or expulsion” include both choosing not to seek re-election and not winning re-election.
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the Member had at least 10 years of service in Congress. At the time of separation, the
Member must leave all contributions in the plan to be eligible for the deferred pension.
Retirement with a deferred, reduced pension is available to a Member at the age of 50 if he
or she retired before that age and had at least 20 years of federal service, including at least 10
years as a Member of Congress.
Retirement Under FERS
There are four possible retirement scenarios for Members who are covered by FERS.
Retirement with an immediate, full pension is available to Members aged 62 or older with at
least five years of federal service; aged 50 or older with at least 20 years of service; and at
any age to Members with at least 25 years of service.
Retirement with an immediate, reduced pension is available at the age of 55 to Members
born before 1948 with at least 10 years of service. The minimum age will increase to 56 for
Members born from 1953 through 1964 and to 57 for those born in 1970 or later.
Retirement with a deferred, full pension is available at the age of 62 to former Members of
Congress with at least five years of federal service.
Retirement with a deferred, reduced pension is available at the minimum retirement age of
55 to 57 (depending on year of birth) to a former Member who has completed at least 10
years of federal service. The pension annuity will be permanently reduced if it begins before
the age of 62.7
Coordination of FERS Benefits with Social Security
The FERS basic annuity was designed to supplement Social Security retirement benefits. FERS
retirees under aged 62 who retire with an unreduced pension are eligible for a temporary
supplement to their FERS pension to fill in until Social Security eligibility is reached at the age of
62. The supplement is an amount estimated to equal the Social Security benefits accrued from
federal service, and is paid from the time of retirement until the age of 62. The FERS supplement
ends at the age of 62 regardless of whether the individual applies for Social Security at that time.
Like Social Security benefits paid before the full retirement age (66 years in 2012), the
supplement is reduced if the retiree has earnings above a specified annual limit. This “FERS
supplement” is payable to Members who retire at the ages of 55 to 57 (depending on year of
birth) or older with at least 20 years of service. A former Member with at least 20 years of service
also may begin to draw the supplement upon reaching the age of 55 to 57.8

7 The pension is reduced by 5% for each year the Member is under age 62 when the pension begins (unless he or she
has completed 20 or more years of service).
8 Members, former Members, and congressional staff can receive an unreduced annuity (and the FERS supplement)
with at least 20 years of service, provided they have reached the minimum retirement age of 55-57. Regular federal
employees must complete at least 30 years of service and reach the minimum retirement age of 55-57 before they are
eligible to receive an unreduced retirement annuity and the FERS supplement.
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Social Security Retirement Benefits
Since January 1, 1984, all Members of Congress have been required to pay Social Security taxes.
The laws governing payment of Social Security taxes and eligibility for Social Security benefits
apply to Members of Congress in the same way they apply to any other covered worker.
Retirement with full benefits. The “full retirement age” under Social Security is 66 years in
2012. Forty quarters of covered employment are required to be eligible for retired worker
benefits.9 Under current law, the age for full benefits is gradually increasing, beginning with
people born in 1937, until it reaches the age of 67 for those born in 1960 or later.
Retirement with reduced benefits. The earliest that retired worker benefits can be taken under
Social Security is the age of 62. Benefits taken at 62 are permanently reduced, based on the
number of months between the person’s age at retirement and the full retirement age. A
worker retiring at the age of 62 in 2011 would receive a benefit equal to 75% of the benefit
that would be payable if the worker were retiring at the Social Security full retirement age.
When the full retirement age reaches the age of 67 in 2022 and later, the monthly benefit paid
at 62 will be 70% of the amount that would be paid if the beneficiary were aged 67.
Social Security Earnings Limit10
Social Security benefits are reduced for beneficiaries under the full retirement age (age 66 in
2012) who have earnings from paid employment that exceed thresholds that are defined in statute.
In 2012, Social Security beneficiaries under the full retirement age of 66 are subject to a
reduction in benefits if their annual earnings exceed $14,640 ($1,220 per month) for any year
prior to the year in which they attain full retirement age. These beneficiaries lose $1 in benefits
for every $2 in earnings above the threshold.
For any months in the same year that Social Security beneficiaries attain full retirement age, the
reduction in benefits is lower and the annual exempt earnings amount is greater than described
above. That is, for any pre-full retirement age months in the year that a beneficiary meets the full
retirement age for Social Security (age 66 in 2012), the annual earnings limit is $38,880 ($3,240
per month). In 2012, individuals lose $1 in benefits for every $3 in earnings above the threshold
for any of these months.
The earnings thresholds described above are adjusted annually for average wage growth in the
U.S. economy. Retirees who have passed the full retirement age receive full benefits regardless of
earnings.
The Thrift Savings Plan: An Integral Component of FERS
The TSP is a defined contribution retirement plan similar to those authorized under Section
401(k) of the tax code for employers in the private sector. For all federal employees enrolled in
FERS, their employing agency contributes an amount equal to 1% of their base pay to the TSP,

9 Fewer quarters of covered employment are required for individuals born before 1929.
10 For more details on this Social Security earnings limit, see CRS Report R41242, Social Security Retirement Earnings
Test: How Earnings Affect Benefits, by Dawn Nuschler and Alison M. Shelton.
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whether or not the employee chooses to contribute anything to the plan. In 2012, employees
enrolled in FERS can make voluntary contributions of up to $17,000. Employee contributions of
up to 5% of pay are matched by the employing agency. Contributions are made on a pre-tax basis,
and neither the contributions nor investment earnings that accrue to the plan are taxed until the
money is withdrawn. Employees covered by CSRS can participate in the TSP, but they receive no
employer matching contributions.
Required Contributions To Retirement Programs
CSRS
Regular federal employees covered by CSRS contribute 7.0% of pay to the Civil Service
Retirement System. Their employing agencies contribute a further 7.0% of payroll to the CSRS
on behalf of these workers. Members of Congress who are covered by CSRS are required to
contribute 8.0% of salary to the plan, and the Congress of the United States makes an employer
contribution of 8.0% of payroll on their behalf.
CSRS Offset
Members of Congress covered by the CSRS Offset Plan contribute 1.8% of pay up to the Social
Security taxable wage base ($110,100 in 2012), and 8.0% of pay above this amount, to the Civil
Service Retirement System. This CSRS contribution rate is temporarily 6.0% rather than 8.0%
through the end of February 2012, as authorized by P.L. 112-78. They also contribute 6.2% of pay
up to the Social Security taxable wage base to the Social Security trust fund. The Social Security
employee contribution rate is temporarily 4.2% through the end of February 2012, as authorized
by P.L. 112-78.
FERS
Regular federal employees contribute 0.8% of pay to the Federal Employees’ Retirement System
and their employing agencies contribute an amount equal to 11.9% of pay in FY2012.11 Members
of Congress and congressional staff pay 1.3% of salary for FERS coverage, and the Congress
pays approximately 16.7% of payroll for congressional employees and 18.3% of pay for
Members who are enrolled in FERS. Members and employees enrolled in FERS also contribute
6.2% of pay up to the Social Security taxable wage base to the Social Security trust fund. The
Social Security employee contribution rate is temporarily 4.2% through the end of February 2012,
as authorized by P.L. 112-78.
Temporary Increase in Employee Contributions to CSRS and FERS
Under the terms of the Balanced Budget Act of 1997 (P.L. 105-33), employee contributions under
CSRS and FERS rose by 0.25% in January 1999 and by a further 0.15% on January 1, 2000.

11 The employer contribution to FERS for each category of federal worker (regular federal workers, congressional
employees, and Members of Congress, for example) may vary slightly from year to year based on estimates of the
actuarial cost of the program made by the U.S. Office of Personnel Management.
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Employee contribution rates were scheduled to increase by another 0.10% on January 1, 2001.
Employee contributions were then to revert to the 1998 levels after December 31, 2002. Pension
benefits accrued by federal workers would not have increased as a result of the temporarily higher
employee contributions to CSRS and FERS mandated by the Balanced Budget Act. The higher
contribution rates mandated by the Balanced Budget Act were repealed for all federal employees
except Members of Congress by P.L. 106-346, the FY2001 Department of Transportation and
Related Agencies Appropriations Act. Contribution rates for Members reverted to 8.0% under
CSRS and 1.3% under FERS on January 1, 2003.
Social Security Payroll Taxes
All Members of Congress pay Social Security payroll taxes, regardless of their other retirement
plan coverage. Currently, the Social Security tax rate of 4.2% temporarily applies to gross wages
up to $110,100, as authorized by P.L. 112-78. Under permanent-law, this employee contribution
rate for Social Security is 6.2%. The Social Security taxable wage base is adjusted each year for
wage growth in the economy.12 Members of Congress, like all other workers covered by Social
Security, pay Medicare Hospital Insurance taxes on all earnings at a rate of 1.45% of pay.
Total Payroll Deductions
Total payroll deductions for federal retirement programs depend on the combination of programs
by which a Member is covered. The required payments are exclusive of any voluntary
investments in the TSP. The following are the required contributions in 2012.
Dual Coverage
Members with full CSRS coverage plus Social Security contribute 14.2% of the first $110,100 of
salary (8.0% to CSRS plus 6.2% to Social Security under permanent law; temporarily 8.0% to
CSRS plus 4.2% to Social Security, as authorized by P.L. 112-78). They pay 8.0% to CSRS on
salary above $110,100.
CSRS Offset
Under permanent law, Members in the CSRS Offset Plan pay 6.2% to Social Security and 1.8% to
CSRS on the first $110,100 of salary; they pay 8.0% to CSRS on salary above $110,100.
Currently, as authorized by P.L. 112-78, Members in the CSRS Offset Plan pay 4.2% to Social
Security and 1.8% to CSRS on the first $110,100 of salary—and 6.0% to CSRS on salary above
$110,100.
FERS
Under permanent law, Members enrolled in FERS pay 1.3% to FERS on total salary and 6.2% to
Social Security on the first $110,100 of salary. As temporarily authorized under P.L. 112-78,

12 Social Security taxes are levied on gross wages. They are not deducted for purposes of determining adjusted gross
income. TSP contributions are deducted in determining AGI.
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Members pay 1.3% to FERS on total salary and 4.2% to Social Security on the first $110,100 of
salary.
Social Security
All Members pay 6.2% of their first $110,100 in salary to Social Security under permanent law.
Currently, through the end of February 2012, this contribution rate for all employees, including
Members, is 4.2% (P.L. 112-78). The taxable wage base of $110,100 is indexed to national
average wage growth and is adjusted annually.
Pension Plan Benefit Formulas
Pension benefits under both CSRS and FERS are computed according to (1) the retiree’s average
annual salary for the three consecutive years of highest pay (known as “high-3” average salary);
(2) the number of years of service completed under the pension plan; and, (3) the “accrual rate” at
which benefits accumulate for each year of service. The pension is the product of these factors,
expressed as follows:

High-3
Years of
Accrual
Annual

x
x
=
Salary
Service
Rate
Pension
Pension Benefits Under CSRS
The accrual rate for each year of congressional service covered by CSRS is 2.5%. Therefore, the
CSRS pension equals

High-3
Years of
CSRS

x
x .025 =
Salary
Service
Pension
For example, after 30 years of congressional service and a high-3 average salary of $172,433, the
initial annual CSRS pension for a Member who retires in December 2010 at the end of the 111th
Congress at the age of 60 or later would be13
$172,433 × 30 × .025 = $129,325
Federal law limits the maximum CSRS pension that may be paid at the start of retirement to 80%
of the Member’s final annual salary. (See 5 U.S.C. § 8339(f).) To receive an initial pension equal
to 80% of final salary, a Member must complete 32 years of congressional service covered by
CSRS (32 × .025 = .80). The smallest starting pension under CSRS is 12.5% of high-3 salary for
a Member with five years service. (Pensions based on less than 10 years of service cannot begin
before the age of 62.)
Most Members who entered Congress before 1984 and who chose to stay in the CSRS elected the
“CSRS offset” plan. When a Member who has retired under the offset plan is aged 62 or older,
the CSRS pension is reduced by the amount of Social Security benefits that he or she is entitled to

13 Base pay for Representatives and Senators was $169,300 in 2008, $174,000 in 2009, and $174,000 in 2010. Pay for
House and Senate leadership positions is higher.
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as a result of congressional service. In the example above, the offset would be approximately
$16,598 in 2011.14
Pension Benefits Under FERS
The accrual rate for congressional service covered by FERS is 1.7% for the first 20 years and
1.0% for each year beyond the 20th. The basic retirement annuity under FERS is equal to
[
Years of
Years of
High-3
Annual
x .017 x
Service
x .01 x
Service
Salary
] + [ High-3
Salary
] = Pension
through 20
over 20
Members who began congressional service before 1984 and who elected to join FERS will
receive credit under FERS from January 1, 1984, forward. Thus, at the close of the 111th Congress
in December 2010, a participant could have a maximum of 25 years of service under FERS.
Assuming that a Member retired at the end of 2010 with 20 years of congressional service under
FERS, and a high-3 average salary of $172,433, the initial annual FERS pension in 2011 would
be
[$172,433 × .017 × 20] = $58,627
There is no maximum pension under FERS.15 (It would take 66 years of service under FERS to
reach the 80% maximum permissible under CSRS.) The smallest unreduced FERS pension is
8.5% of high-3 salary with five years of service (.017 × 5 years), which is payable no earlier than
the age of 62. A Member with 10 years of service who takes a FERS pension at the earliest
allowable age of 55 would receive a reduced pension equal to 11% of high-3 salary (.017 × 10
years, reduced by .05 times the seven-year difference between the individual’s age at retirement
and the age of 62).
Social Security Benefits
Social Security benefits are determined by a formula based on earnings in all Social Security-
covered employment. The benefit structure of Social Security was designed to replace a higher
proportion of earnings for lower-paid workers than for the higher-paid. For example, the initial
benefit payable to a low-wage worker who retired at the full retirement age in 2011 was $908 per
month, or $10,896 per year.16 This is equivalent to about 73% of the annual earnings of a worker
employed year-round, full-time at the minimum wage.17 For a worker whose earnings each year

14 This estimate, calculated for illustrative purposes, is based on the assumption that a Member of Congress who had
been in office on December 31, 1983 and who retired at the end of 2010 would have had 27 years of Social Security
participation as a Member of Congress. According to the Social Security Administration, the monthly benefit for a
career-long high-wage earner retiring at age 62 in 2011 (i.e., all 35 years of earnings in the calculation of Social
Security benefits were at the taxable maximum) would be $1,793. This would be $21,516 on an annual basis. This
amount was then multiplied by the ratio of 27/35, which is the proportion of Social Security participation as a Member,
to produce an estimated offset of $16,598.
15 It is important to remember that this FERS defined-benefit pension was designed to complement Social Security
participation and the Social Security benefit.
16 The Social Security Administration defines a “low-wage” worker as one who earns 45% of the national average
wage or less.
17 $7.25 per hour × 40 hours per week × 52 weeks = $15,080. $10,896/$15,080 = .73.
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were equal to or greater than the Social Security maximum taxable wage base, the initial benefit
paid to a new retiree at the full retirement age in 2011 was $2,366 per month, or $28,392 per year.
This is equal to about 27% of the maximum taxable wage base of $106,800 in 2011. It would
represent a smaller percentage of the annual wages of workers whose earnings exceeded the
taxable wage base.
Pensions for Members with Service Under Both
CSRS and FERS
Members who were participating in CSRS when the FERS plan went into effect could elect to
leave CSRS and join FERS during a six-month “open season” in 1987.18 Members who switched
to FERS are entitled to a CSRS pension for the years before 1984, provided that they had
completed at least five years of service under CSRS by December 31, 1983. Their service from
January 1, 1984, onward is covered under FERS. When these Members retire, their pension is
computed using the CSRS formula for the CSRS-covered years and the FERS formula for the
years covered by FERS. The same high-3 salary, which is generally the salary earned in the three
years immediately preceding retirement, is used in both formulas. The two pension amounts
(CSRS and FERS) are then added together. For Members who switched from CSRS to FERS,
FERS rules govern the age and years of service for retirement eligibility.
For example, the pension for a Representative or Senator who retires in December 2010 at the
end of the 111th Congress with a total of 32 years of service (5 years covered under CSRS and 27
years covered under FERS) and a high-3 salary of $169,500 would be:
$172,433 ×
.025
× 5
=
$21,554
(CSRS)
+ $172,433 × .017 × 20 = $58,627
(FERS)
+
$172,433 ×
.01 × 7
=
$12,070
(FERS)

Total pension = $92,251


Retirement Benefits Under the CSRS Offset Plan
Members who were participating in CSRS before January 1, 1984, and who chose not to switch to
FERS could elect either to have full coverage under both CSRS and Social Security or to stay in
CSRS and have their CSRS contributions and benefits reduced (“offset”) by the amount of Social
Security taxes paid and Social Security benefits received. New Members who enter Congress
with at least five years of previous civilian federal employment that was covered under CSRS
also may join the CSRS Offset Plan. Under this plan, a Member pays 6.2% of salary up to the
Social Security taxable maximum ($110,100 in 2012) to Social Security and 1.8% of salary up to
this earnings level to CSRS. When annual earnings reach the maximum amount taxable under
Social Security, the Member pays 8.0% of salary for the rest of the year to CSRS.19 During

18 P.L. 105-61, enacted on October 10, 1997, authorized a second open season from July through December 1998
during which employees covered by CSRS could switch to FERS.
19 Through the end of February 2012 (as authorized by P.L. 112-78), Members in the CSRS Offset Plan pay 4.2% to
Social Security and 1.8% to CSRS on the first $110,100 of salary—and 6.0% to CSRS on salary above $110,100.
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retirement, the individual’s CSRS pension is reduced by the amount of the Social Security benefit
that is attributable to his or her federal service. The reduction in the CSRS annuity begins at the
age of 62, whether or not the retiree elects to receive Social Security at that time.
As an example of the CSRS Offset Plan, assume that a Representative or Senator retires at the
end of the 111th Congress with 30 years of congressional service. According to the CSRS benefit
formula, this Member’s initial retirement annuity would be $129,325. However, if he or she were
aged 62 or older, this amount would be reduced by an amount equal to the Social Security
benefits earned from congressional service from January 1, 1984, through December 31, 2010.
For an individual retiring in December 2010 at the age of 62 with 27 years of congressional
service covered by Social Security, the reduction in 2011 would be approximately $15,369.
Replacement Rates
The adequacy of pension plans is often evaluated by comparing the benefits paid at the time of
retirement with pre-retirement earnings. The initial annual pension is computed as a percentage of
final annual pay to derive the “earnings replacement rate.” This is the proportion of pre-retirement
earnings replaced by the pension. In both CSRS and FERS, pensions are based on the average of
the highest three consecutive years of earnings, which are usually the final three years before
retirement.
Table 1 shows the percentage of high-3 average pay replaced by a congressional pension for a
Member retiring with an immediate pension under CSRS or FERS at specified ages and years of
service. (Note that because FERS benefits apply only to service after 1983, no one will have
completed 30 years under FERS until 2014. Additionally, FERS benefits were designed to
complement Social Security benefits; therefore, FERS annuities necessarily have lower
replacement rates than CSRS annuities.)
Table 1. Annuity Replacement Rates for Members

CSRS FERS
Age 50, 20 years in Congress
42.5%
34.0%
Age 55, 30 years in Congress
71.3%
44.0%
Age 60, 10 years in Congress
25.0%
15.3%
Age 62, 5 years in Congress
12.5%
8.5%
Source: The Congressional Research Service.
Notes: These replacement rates reflect only an immediate pension annuity taken by a Member of Congress.
They do not include any Social Security or Thrift Savings Plan benefits. Unlike CSRS annuities, FERS annuities are
designed as a complement to Social Security benefits, as well as the individual retirement accounts that are part
of the Thrift Savings Plan. Therefore, FERS annuities necessarily replace less in former pay than CSRS annuities.
Cost-of-Living Adjustments
CSRS annuities are adjusted for inflation once each year on the same schedule and by the same
percentage as Social Security benefits. These “cost-of-living adjustments,” or COLAs, are based
on the rate of increase in the Consumer Price Index for Urban Wage Earners (CPI-W). CSRS
annuities and Social Security benefits are increased each January by the annual percentage
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change in the CPI-W. As a cost-control measure, Congress has mandated that FERS annuities will
increase by less than the percentage change in the CPI-W whenever the annual rate of increase in
that index exceeds 2.0%. If the CPI-W rises by 2% or less, FERS annuities are increased by the
same percentage as the increase in the CPI. If the CPI rises by 2.1% to 3%, FERS annuities are
increased by 2%. If the CPI rises by more than 3%, FERS annuities are increased by one
percentage point less than the rate of increase in the CPI.20
Initial CSRS annuities may not exceed 80% of a Member’s final pay. Over time, however, if
congressional pay were to remain unchanged, a retired Member’s CSRS pension could exceed the
nominal amount of his or her final pay. Nevertheless, because COLAs merely prevent the
purchasing power of an annuity from being eroded by inflation, the real value of a CSRS pension
does not increase or decrease during retirement, provided that the price index on which the COLA
is based is an accurate measure of the rate of inflation.
The Thrift Savings Plan
The Thrift Savings Plan (TSP) is a tax-deferred investment program through which federal
employees can save money to supplement their pension income.21 The TSP is open to participants
in both CSRS and FERS, but in consideration of the smaller pensions paid by FERS, Congress
has authorized more generous incentives for workers covered by FERS to save for retirement
through the TSP. In 2012, FERS participants may invest up to $17,000 in the TSP. The maximum
annual contribution is indexed to inflation.22 Individuals enrolled in FERS who invest in the TSP
also receive a matching contribution from their employing agency on the first 5% of pay that they
invest in the plan. CSRS participants also may invest up to the annual statutory maximum in the
TSP, but they receive no employer matching contributions.
The government automatically deposits into the TSP an amount equal to 1.0% of basic pay on
behalf of an employee enrolled in FERS, regardless of whether the individual voluntarily invests
additional sums. Members of Congress and congressional staff become vested in this 1.0%
“agency automatic contribution,” plus any investment earnings on it after completing two years of
service. All participants in FERS are immediately vested in their own contributions and in
government matching contributions to the TSP, as well as any investment earnings on these
contributions. Contributions to the TSP are made on a pre-tax basis. Contributions and investment
earnings are not taxed until money is withdrawn from the plan.
Withdrawals from the TSP are subject to the federal income tax, and withdrawals before the age
of 59½ may be subject to a 10% tax penalty.23 There is no penalty if the individual is aged 55 or
older and is eligible for an immediate pension from CSRS or FERS; if the withdrawals are in the
form of a life annuity; or if the withdrawals are taken in a series of “substantially equal periodic

20 For more details on COLAs for CSRS and FERS pensions, see CRS Report 94-834, Cost-of-Living Adjustments for
Federal Civil Service Annuities, by Katelin P. Isaacs.
21 For a more thorough description of the Thrift Savings Plan, see CRS Report RL30387, Federal Employees’
Retirement System: The Role of the Thrift Savings Plan, by Katelin P. Isaacs.
22 The annual contribution limits are established in law at 26 USC §402(g).
23 There are some exceptions to the 10% penalty for withdrawals before age 59½. For more information, see CRS
Report RL31770, Individual Retirement Accounts and 401(k) Plans: Early Withdrawals and Required Distributions, by
John J. Topoleski.
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payments” on the basis of the individual’s remaining life expectancy.24 Employees who leave
federal employment can continue to defer taxes on their TSP account balances either by leaving
the money in the TSP or by transferring all or part of these funds to an Individual Retirement
Account (IRA) or other eligible retirement arrangement, such as a 401(k) plan. At retirement,
participants may withdraw money from their TSP accounts in any of four ways. They can
• receive the account balance in a single payment.
• receive a series of monthly payments. (Payments may be for a fixed number of
months or a fixed dollar amount. Monthly payments also can be based on an IRS
life expectancy table.)
• purchase a life annuity.
• elect a partial distribution as a lump sum and take the remainder as either a series
of equal payments or as an annuity.
Participants who have separated from federal service must make an election for withdrawing
funds from the TSP no later than February 1 of the year following the year in which the later of
two events occurs: (1) the individual turns 65, (2) the individual reaches the 10th anniversary of
the first contribution to his or her account. Separated employees must begin withdrawals no later
than April of the year after they reach the age of 70½, at which time the TSP will begin to
distribute funds to the participant automatically if he or she has not yet made a withdrawal
election. Until an employee separates from the federal government, he or she can continue to
contribute to the TSP, regardless of age.
Mandatory Coverage Under FERS
Until the Legislative Branch Appropriations Act, 2004 (P.L. 108-83), all Members could opt to
decline coverage under FERS. Section 104 of P.L. 108-83, however, amended the provisions of
law applicable to coverage of Members of the U.S. House of Representatives under FERS.
Effective with passage of P.L. 108-83, Representatives (including a Delegate or Resident
Commissioner to the Congress) entering office on or after September 30, 2003, may not elect to
be excluded from such coverage. All Senators and those Representatives serving as Members
prior to September 30, 2003, continue to be able to decline FERS coverage.
Retirement Benefits for Members with Limited
Service
The vesting requirement to become entitled to a pension benefit under CSRS or FERS is five
years. Members who do not meet this five-year requirement—for instance, one-term Members in
the U.S. House of Representatives—are not entitled to an annuity under CSRS or FERS. It may
be the case, however, that an individual with less than five years of service as a Member may

24 Individuals who separate from federal service before age 55 can receive monthly payments based on life expectancy
without a tax penalty and withdraw the remaining balance at age 59½ in a lump sum.
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meet this vesting requirement as a result of combining previous federal service or additional
federal service subsequent to service as a Member.25
To qualify for a retired worker Social Security benefit, an individual must accumulate at least 40
quarters of covered employment, or 10 years of Social Security-covered employment (among
other requirements). These Social Security benefits are based on the average of a worker’s highest
35 years of earnings. A Member of Congress with limited service may qualify for Social Security
benefits based on a lifetime earnings and employment history that includes more than
congressional service.
Finally, Members of Congress who participate in FERS—even Members with limited service—
are immediately vested in their own contributions and in any government matching contributions
to their TSP accounts, as well as any investment earnings on these contributions. In addition,
Members of Congress and congressional staff become vested in the 1.0% “agency automatic
contribution” to their TSP accounts under FERS, plus any investment earnings on it, after
completing two years of service.
Forfeiture of Annuity
Section 8312 of Title 5 provides that a federal employee, including a Member of Congress, may
not receive a retirement annuity for any period of federal service if that individual is convicted of
certain offenses that were committed during the period of service when the annuity was earned. In
general, the crimes that would lead to forfeiture of a federal retirement annuity under this
provision of law are limited to acts of treason or espionage.
Section 401 of the Honest Leadership and Open Government Act of 2007 (P.L. 110-81,
September 14, 2007) amended 5 USC §8332 to exclude from creditable service toward a
retirement annuity any service as a Member of Congress of an individual convicted of a felony
involving (1) bribery of public officials and witnesses; (2) acting as an agent of a foreign
principal while a federal public official; (3) fraud by wire, radio, or television, including as part of
a scheme to deprive citizens of honest services; (4) prohibited foreign trade practices by domestic
concerns; (5) engaging in monetary transactions in property derived from specified unlawful
activity; (6) tampering with a witness, victim, or an informant; (7) racketeer influenced and
corrupt organizations; (8) conspiracy to commit an offense or to defraud the United States; (9)
perjury; or (10) subornation of perjury.
The law directs the Office of Personnel Management to issue regulations to specify the
circumstances under which the spouse or children of such individual may be eligible for benefit
payments under CSRS or FERS, taking into consideration (1) the financial needs of the spouse or
children; (2) whether the spouse or children participated in a specified offense of which such
individual was convicted; and (3) what measures, if any, may be necessary to ensure that the
convicted individual does not benefit from any such payment.


25 For more details on age and length of service requirements for regular federal service under CSRS and FERS, see
CRS Report 98-810, Federal Employees’ Retirement System: Benefits and Financing, by Katelin P. Isaacs.
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Author Contact Information

Katelin P. Isaacs

Analyst in Income Security
kisaacs@crs.loc.gov, 7-7355


Acknowledgments
This report was originally prepared by former CRS Specialist Patrick Purcell. Please direct any inquiries to
the listed author.

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