Pay boost means a pension windfall for senators


WASHINGTON -- The $23,200 pay raise that senators voted themselves last week has a hidden, delayed impact that could cost taxpayers millions of additional dollars in future pension payments.

For some senators, voting for the pay raise meant that they were voting themselves a lifetime pension of more than $100,000 a year and, in some cases, more than their current salaries.

For example, Sen. Edward M. Kennedy, D-Mass., would be entitled to a yearly pension of approximately $111,600 if he retired at the end of his current term in 1995. His salary is $101,900, the same as other rank-and-file members; in October, it will rise to $125,100.

Appropriations Committee Chairman Robert C. Byrd, D-W.Va., the chief architect of the pay increase, whose salary is $113,400 as president pro tempore of the Senate, would receive a pension of about $111,800.

David Keating of the National Taxpayers Union called the pay raise and resulting increase in pensions "a golden parachute for senators. . . . The average taxpayer retires on a fixed income; our lawmakers retire in luxury."

Unlike most people who retire, senators are eligible to collect their full pensions as early as age 50, and they get an automatic annual cost-of-living increase based on inflation.

Congress' pensions are computed on a formula that takes 2.5 percent of the average annual earnings during the three last years of service and multiplies it by the number of years served. A member must have served at least five years to be eligible.

By the taxpayers group's estimate, the pay raise alone could add $26.3 million to the lifetime pension benefits of current eligible members of the Senate, assuming that they retire in 1995 or later.

While it is impossible to calculate now what the exact pension benefits for each senator will be when he or she retires, it is possible to estimate what they would get if they retired from 1995 to 1997.

The NTU, a citizen lobbying group, produced the figures showing what the long-term impact of the higher Senate pensions would be.

It calculated that the value of the pay raise in added pension benefits would range from $80,000 to $717,000 for senators, depending on their length of service, age at retirement and expected life spans.

At the low end of the scale is Sen. Alan Cranston, D-Calif., who will retire in 1993 at the age of 79 and is expected to receive an additional $80,300 in pension benefits. In all, Mr. Cranston's pension would be $63,800 a year. Without the raise, it would be $57,500.

Sen. Trent Lott, R-Miss., who will be 54 in 1995, could collect as much as $717,100 in extra benefits over his life if he chose to retire three years from now. His annual pension would be $74,900. Without the raise, it would be $61,100.

House members, who gave themselves a similar raise in late 1989, will receive the same increased pension benefits.

Factoring in the cost-of-living allowance, a House member who was at least 50 years old with 18 years' service would qualify for an annual pension of about $62,700 upon retirement in 1993; with 30 years' service, the benefit would be $106,500. Without the pay raise, the corresponding pensions would be $45,800 and $76,400.

Congressional pensions are generous. A study two years ago, by an independent group called Senate Forums and Federal Pensions, indicated that lifetime pension benefits of federal employees were about 2 1/2 times greater than those of private industry workers.

In addition to their pensions, to which they contribute 8 percent of their salaries, members can elect to take part in a personal 401(k) pension savings plan. Taxpayers also can contribute to that plan, up to $6,750 a year per member.

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