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[at-l] Social Security (Off Topic) Internet MYTH!



At 03:25 PM 4/16/2005 -0400, Bror8588@aol.com wrote:
>GET A  BILL  STARTED TO PLACE ALL POLITICIANS ON SOC. SEC.
>
>This must be   an issue in "2008". Please! Keep it going.
>
>SOCIAL  SECURITY:
>(This is worth reading. It is  short and to the point.)
>Perhaps  we are asking the wrong questions during election years.
>Our  Senators and Congresswomen do not pay into Social Security and,  of
>course, they do not collect from it.
>You  see, Social  Security benefits were not suitable for persons  of their
>rare  elevation in society. They  felt they should have a special  plan for
>themselves. So, many years ago they voted in their
>
>own  benefit  plan.
>
>In more recent years, no congressperson has felt  the  need to change it.
>After all, it is a great plan.
>
>For  all practical purposes their plan works like this:
>When  they retire, even if they only had one term in office and did  nothing,
>they continue  to draw the same pay until they die.
>
>Except it may increase from time to time for cost of  living  adjustments.

TOTALLY FALSE! This is an Internet MYTH! From the Congressional Institute:

>Congressional Myths and Misconceptions:
>Answers for common questions about your Representatives and Senators
>
>What kinds of benefits do Members receive?
>
>The public is frequently misled and misinformed about this question, in 
>part due to confusion over the variety of current arrangements still in 
>effect. Unfounded allegations of lavish pensions being awarded for only a 
>few years of service and of huge annuities paid to spouses and widows have 
>contributed to creating the misconception that Members receive benefits 
>far beyond those that are accessible to most Americans.
>
>All Members are eligible to participate in the standard Federal employee 
>health and life insurance coverage options under the Federal Employees 
>Health Benefits Program and the Federal Employees Group Life Insurance Program.
>
>The retirement benefits of Members can be much more confusing. All 
>Members, like other working citizens, are required to participate in 
>Social Security, paying 6.2% on the first $87,900 of their wages (the cap 
>currently set for all worker earnings) and an additional 1.45% on all 
>earnings for Medicare.
>
> From here, Congressional benefits get more complicated. An old program 
> dating from 1920 for providing pensions to civil servants, the Civil 
> Service Retirement System (CSRS) is still in effect for Members who first 
> took office before 1984. The system was designed to provide pensions for 
> officials who could be serving for a relatively limited period of time 
> compared to other workers due to constantly changing political 
> appointments and election results. Members still covered by the CSRS pay 
> 8% of their earnings to the system, a contribution that is matched by the 
> Congress. This is in addition to the 6.2% they pay on their first $87,900 
> to Social Security. If a Member chooses to combine their CSRS coverage 
> with Social Security, they pay 6.2% to Social Security and 1.8% to CSRS 
> on the first $87,000 and 8% on everything over that. The average pension 
> paid out in 2002 for CSRS was $55,788 to a total of 340 retired Members.
>
>In 1987, the CSRS was phased out and replaced with the Federal Employee's 
>Retirement System (FERS). FERS was designed to work with Social Security 
>to provide pensions for all Federal employees and requires Members to pay 
>the standard 6.2% to Social Security, and an additional 1.3% on their 
>first $87,900 and 1.3% on all income over that to FERS. A major innovation 
>that came with FERS was the Thrift Savings Plan, which functions similarly 
>to a 401(k) account and allows Members to contribute up to 14% of their 
>pay (depending on IRS limits), a sum that is matched up to 5% of the 
>salary by the employer.
>
>The actual amount a retiring Member receives per year is based on a 
>formula that evaluates their years of service, highest salaries, and a 
>benefits accrual rate.* The exact number varies widely from person to 
>person depending on how long they worked in Congress and how they chose to 
>plan for their retirement. The average retired Member in 2002 who had used 
>the FERS system while in office had served for served 18.7 years and 
>receives $41,856 annually. Those who had retired under the older CSRS 
>system averaged 20 years of service and a retirement of $55,788 per year 
>in 2002.
>
>* FERS formula, as of 2004:
>[ (3-year average high salary) * .017 * (years of service through 20)] + [ 
>(3-year high salary average) * .01 * (years of service over 20) ] = Annual 
>pension