Americans for Tax Reform today sent the following letter to Congressman Mike Coffman (R-Colo.):

On behalf of Americans for Tax Reform, I am pleased to support H.R. 2913, a bill which would prevent Members of Congress from accruing any further pension benefits.

Congressmen and Senators participate in the same Federal Employee Retirement System (FERS) as other federal workers.  This plan is a hybrid system.  Most of the benefits come from a 401(k)-style payroll deferral program called the “Thrift Savings Plan (TSP).” Your bill leaves this defined contribution section of retirement benefits untouched for Members of Congress.

The focus of H.R. 2913 is the defined benefit portion of the retirement plan.  Currently, the defined-benefit Congressional pension plan gives federal lawmakers, who have served at least five years, an annual payment equal to 1.7 percent of their salary (currently $174,000) for the first 20 years and an additional 1 percent for each year served after the 20 year mark. Members of Congress are required to pay 1.3 percent of their annual salary into the pension plan.  H.R. 2913 ends this program for Members of Congress going forward, while preserving what has already been accrued.

Most Americans don’t have access to both the top-notch Thrift Savings Plan and a defined benefit pension plan.  Members of Congress should not have a retirement plan that much better than most of their constituents.  They will still have a better plan because of TSP, but H.R. 2913 closes the gap somewhat, and in a way that holds the defined contribution portion harmless.  Over time, the entire FERS structure should be defined contribution for all federal employees.

 I would urge all Members of Congress to co-sponsor H.R. 2913.

PDF of Letter

What do you think?  Should Members of Congress receive a pension?