WASHINGTON – Beyond the memories, when Rep. Shelley Berkley leaves Congress at the end of the month she will take with her a final benefit – a $37,000 taxpayer-subsidized annual pension she can start collecting almost immediately.
Berkley qualifies for the retirement pay by virtue of her 14 years of service and based on a formula tied to her $174,000 annual salary in the House of Representatives.
The Nevada Democrat, who is leaving Capitol Hill after losing a bid for the U.S. Senate, qualifies to begin collecting when she turns 62, which is on Jan. 20.
Berkley is among the wealthier members of Congress. She and her husband, Las Vegas nephrologist Larry Lehrner, have assets valued at a minimum $9 million and investments that generate at least $500,000 in annual income.
To that portfolio, she can add a pension from Congress that is said to be substantially higher than received by executives in the private sector, and more than rank-and-file federal workers.
The retirement pay qualifies for annual cost-of-living increases once Berkley starts collecting. This year’s COLA was 3.6 percent. There were no cost-of-living adjustments in 2010 and 2011.
Berkley’s retirement pay sum also assumes she signed up for a “spousal annuity option.” If she did, her husband would qualify to receive half of her payment amount if he outlives her, according to Pete Sepp, executive director of the National Taxpayers Union and an expert on federal pensions.
Congressional pensions “generally are two to three times more generous than what the private sector would offer a similarly paid person,” Sepp said. Similarly they are more generous than those offered to government executives.
Lawmakers contribute a higher percentage of their monthly pay toward their retirement, 1.3 percent versus 0.8 percent for federal workers. But they earn it back more quickly when they start collecting.
“An executive branch employee retiring at age 62 next year, with 10 years of service, versus a member of Congress, the member of Congress’s pension would be $26,600, the executive branch employee would be $15,600 because he has a less generous formula,” Sepp said.
The disparity dates to 1946 when Congress enacted the retirement law for its members, according to the Congressional Research Service.
A Senate report at the time stated that a generous retirement plan “would contribute to independence of thought” and offer incentives for older and infirm lawmakers to retire while encouraging “younger members with fresh energy” to run for office.
The promise of a golden pension appears, though, not to have entered into the decisions by most lawmakers to retire or keep running for office, according to other studies.
A 1995 Congressional Research Service study showed the average percentage of House members seeking re-election was 90 percent between 1900 and 1946. Between 1946 and 1994 the percentage increased slightly.
“Since 1994, the rate has fluctuated but not greatly,” Sepp said in testimony to the House Oversight and Government Reform Committee earlier this year.
Among other Nevadans who left Congress in recent years, former Sen. John Ensign qualifies for a $27,000 full pension when he turns 62 in 2020, based on 10 years of service between 2001 and 2011, when he resigned in the midst of an ethics scandal.
Former Rep. Jon Porter, who served from 2003 until 2009, qualified for $15,000 in estimated annual retirement pay when he turns 62 in 2017, according to the National Taxpayers Union.
Former Rep. Jim Gibbons, who served from 1997 until the end of 2006 when he became Nevada governor, would have qualified for a starting pension in 2006 of about $27,500 for his service in Congress, the group estimated.
Gibbons also could have supplemented his Capitol Hill pension with retirement pay from his active duty service in the Air Force, Sepp said.
Retirement pay issues for Porter and Gibbons also could have been complicated by divorces, Sepp said.
Participation in the retirement plan was voluntary for lawmakers serving before Sept. 30, 2003, but was made mandatory that year.
Rep. Joe Heck, R-Nev, discovered that when he tried to withdraw from the retirement system and claim a refund of the $188 per month that was being deducted from his paycheck. He was turned down.
Heck subsequently introduced a bill in June that would permit lawmakers to decline a pension. It drew only three co-sponsors and did not get a hearing this year.
Contact Stephens Washington Bureau Chief Steve Tetreault at email@example.com or 202-783-1760. Follow him on Twitter @STetreaultDC.