Congress' pension: Nice and secure

NEW YORK (CNNMoney.com) - In the coming months, you are going to read a lot of stories on our site about pensions and attempts by Congress to "reform" the system.
No doubt there will be a lot of sound bites from various Congress folk ... some "outraged" by the loss of pensions and others pointing to "economic reality" while professing sympathy for the working American.
Amid all the hubbub, keep this in mind: Congress has a pension plan ... and it's not at risk.
It's a fairly nice one, too. Not extravagant, but nice.
Members are eligible to start collecting at age 62 if they have at least five years of service. If they have 20 years of service under their belt, they can retire at 50. With 25 years of service, they can retire any time.
What they get depends on a formula based on years of service and average pay(natch, right?).
So a congressman with 22 years of service and whose average salary for the top three years was $153,900 gets $84,645. A current congressman ending up with six years of service (it's two-year terms, after all) would get at least $16,503 (at age 62, of course).
In actuality, the average congressional pension payment ranges between $41,000 and $55,000, based on 2002 data from the Congressional Research Service.
Now, a retiring congressman isn't allowed to get more than 80 percent of their salary upon retirement. But after retiring, cost of living adjustments kick in, which can add substantially to the payment.
Add it all together and the Congressional pension program is about two-to-three times more generous than the average corporate executive pension plan, according to the National Taxpayers Union.
What did they pay in for this benefit? It's a little complicated, of course, because one kind of pension program applies to senators and representatives elected before 1984 and another applies to those elected after. The Congressional Research Service has a nice little explainer here, if you are a glutton for detail punishment. Basically, the politicians chip in 8 percent of their salary split between the pension program (about 1.3-1.8 percent) and Social Security (contrary to various Internet rumors, Congress does pay Social Security taxes.)
These payments cover about one-fifth of the actual cost of their pension, according to the Taxpayers Union.
So Congress folk get a better pension and don't have to pay for all of it. They also have the equivalent of a 401k program (complete with a 5 percent employer match). In some cases Social Security kicks in. And given their medical, dental and travel benefits, plus expenses paid by the office, members of Congress have plenty of opportunity to save for retirement. (And if they get into trouble, as they sometimes do, the pension often isn't up for grabs). At $165,200 a year (after their raise this month), seems like they have some money to do it with too.
Now don't get me wrong. Plenty of senators and representatives work hard. Very hard.
But in the coming months, when you hear various elected officials bemoan the state of pensions and the need for reform keep this in mind:
They got theirs and it isn't going away ... that would take an act of Congress.