Nice work if you can get it
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 bribery.
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.
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 service.
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.
Not to mention that revolving door between Congress and K Street, why these fine public servants really rake it in. A small token of our respect for their years of sacrifice.