After retiring from a 36-year career in the U.S. House of Representatives last month, Norm Dicks has no doubt that he’s worth every penny of his new pension: It will allow the Washington state Democrat to cash a monthly check from the U.S. government for $7,365.82.
That’s the net pay on his gross annual pension of $107,268, or $8,939 per month.
“I think I did a good job for the people in the state of Washington, you know. I think that this is fair, I really do,” Dicks, 72, said in an interview.
Dicks, who’s now working as a consultant with defense companies, is among a handful of departing members of Congress who are eligible for six-figure pensions in the first year of retirement. If he lives long enough, his pension could exceed his congressional salary of $174,000 in 2012, with members eligible for annual cost-of-living increases.
Altogether, about 75 new retirees will add to the estimated $28 million in yearly pension costs for Congress.
Critics say the pension system is far too generous and that members of Congress should put their retirement money on the table as they look for ways to cut federal spending.
Florida Republican Rep. Rich Nugent, a retired sheriff elected in 2010, said Congress should at least allow members to opt out of the pension system. Some members who’ve been around awhile declined to participate, including Republican Reps. Howard Coble of North Carolina and the just-retired Ron Paul of Texas.
But since September of 2003, all members of Congress have been required to participate in the pension plan.
“I guess that’s kind of the way you cover your butts, I’m not sure,” Nugent said in an interview.
Last month, he reintroduced a bill called the Congress Is Not A Career Act that would permit lawmakers to choose not to participate in the pension system or the federal Thrift Savings Plan, a 401(k)-style plan that supplements the pension and allows members to save their own retirement money, receiving a match of up to 5 percent from federal taxpayers. He said the nation’s founding fathers never intended for people to make careers out of serving in Congress.
“Personally, I don’t believe that we should be up there for 30 or 40 years. . . . It’s just my personal belief that it’s an honor to serve and I really shouldn’t be enriching myself long after my service is over,” Nugent said, adding that his bill hasn’t been popular – he has yet to line up a single co-sponsor. “I’ve had some folks that are senior to me that are not necessarily very happy with that.”
As of October 2011, 495 retired members of Congress were drawing pensions under two different plans, the Congressional Research Service said in a report to Congress last November.
Under the older plan, which covered members who were elected before 1984, 280 were receiving average annual pensions of $70,620. The remaining 215 members were getting smaller pensions under the new plan, averaging $39,576 in 2011, the report said.
According to estimates from the National Taxpayers Union, Dicks and least five others who retired last month are eligible for maximum pensions of $125,000 after serving at least 32 years in Congress: six-term Republican Sen. Richard Lugar of Indiana, Democratic Rep. Dale Kildee of Michigan and three House members from California – Democrat Pete Stark and Republicans Jerry Lewis and David Dreier.
“That’s a pretty rich pension. I will tell you that most people don’t receive that kind of pension,” Nugent said.
Dicks, the longest-serving House member in Washington state history, who ranked 10th in seniority among the 435 House members, said he’d decided to lower his pension by opting for a survivors benefit that will provide payments to his wife, too. And he said he’d contributed up to 7.5 percent of his income each year to save for his retirement.
“It isn’t like you haven’t made a personal contribution,” said Dicks, who worked eight years as a Senate staffer before joining the House in 1977.
On average, congressional pensions are two to three times as generous as those offered to workers in the private sector with similar salaries, according to Pete Sepp, the executive vice president of the National Taxpayers Union, a 362,000-member group that’s long lobbied for tightening up the pension system. But he said those comparisons had become increasingly difficult to make because so many private employers have scrapped their defined-benefit plans, opting for 401(k) plans that rely mainly on employee contributions.
Specific pension amounts vary depending on years of service in Congress, whether members had other jobs in the federal government, when they enrolled and whether they’re married.
Estimates from the taxpayers union show the wide range of pensions that a handful of recent retirees have qualified for: $64,000 per year for Connecticut independent Sen. Joe Lieberman; $60,000 for Democratic Rep. Jerry Costello of Illinois; nearly $52,000 for Texas Republican Sen. Kay Bailey Hutchison; nearly $48,000 for Republican Rep. Sue Myrick of North Carolina; $37,000 for Democratic Rep. Shelley Berkley of Nevada; $35,000 for Washington Democratic Rep. Jay Inslee, who became the state’s governor last month; $33,500 for Democratic Rep. Dennis Cardoza of California; $26,600 for Democratic Rep. Brad Miller of North Carolina; $21,000 for Florida Republican Rep. Connie Mack; $16,000 for Democratic Rep. Heath Shuler of North Carolina; and nothing for Florida Republican Rep. Allen West, who served only two years, short of the five-year minimum required to get a congressional pension.
Eligible lawmakers generally may start receiving payments at age 62, or even younger if they served for a long period.
Sepp, who calculated the estimates, has been working on the issue for years, testifying before Congress last year and trying to shed light on a system that keeps private any specific information on how much lawmakers receive. In the past, the federal government released pension information under the Freedom of Information Act, but he said that changed in the late 1980s as a result of court cases involving privacy issues.
Sepp said members of Congress had designed a retirement system that provided them with pensions that were even more lucrative than those that other federal workers received. Last year, he told a congressional subcommittee that Congress had succeeded in creating what many consider “one of the most generous pension programs ever created.” And he said that members of Congress now had an opportunity to lead by example by making their benefits part of a deficit-reduction package this year.
“It’s not the easiest financial hit for lawmakers to take, but neither would it be a catastrophe,” Sepp said in an interview. “At the very least, they could harmonize their benefit formula with that of the rest of the federal government.”
On average, Sepp said, Congress’ pension system costs $25 million to $30 million per year, depending on the ages of retirees and their lengths of service.
With Congress under pressure to constrain spending, Dicks said he wouldn’t be surprised if members made changes to the pension system, such as capping cost-of-living increases.
While the federal government doesn’t release pension information, Dicks said he had no problem disclosing his, since it involves taxpayers’ money.
“This is public,” he said. “And as I said, I’m proud of my service.”
Dicks said he was expecting his first pension check to arrive no later than mid-March.