Entries in Pensions (1)


Pension Perk Takes Hit as Congress Passes Reform Bill

Hemera/Thinkstock(NEW YORK) -- The payroll tax cut extension that Congress passed Friday won’t affect just the middle class.

Tucked inside the measure that will give 160 million Americans an average $1,000 in tax cuts for the rest of the year is also legislation that reins in pensions for incoming legislators to put them on par with what other federal employees earn.

President Obama plans to sign the bill immediately.

In 2013, all new members of Congress will be treated like other federal workers in computing pensions, according to Fredrick Piccolo, chief of staff for U.S. Rep. Dennis Ross, R-Fla., who pushed the reform bill through despite heavy opposition.

Also in 2013, new members and members with less than five years of service will contribute the same increased percentage -- 3.1 percent -- of their income to their pension.

In November, ABC News reported that Congress had a better pension plan than just about anybody, even other federal employees.

A 20-year member of Congress who is at least 62 collects more than $50,000 a year for life. Congress members are also eligible for pensions at 50 if they’ve completed 20 years of service. If they’ve served more than 20 years, they can collect their pension despite their age.

U.S. Rep. Howard Coble, R-N.C., had sponsored the pension reform measure for the last 28 years, but to no avail. He’d even opted out of the pension plan.

In November, Ross, the chair of a subcommittee that had yet to act on the bill, promised ABC News that a hearing would take place before the end of January.

“I would love to see it get up out of committee and on the floor. I think the American people are craving credibility in their elected officials,” Ross said at the time.

Friday, Ross called the idea that Congress should live under the same rules as regular U.S. citizens a “quintessentially American ideal.”

“While there remains much more work to do to ensure that Congress lives under the same rules as our fellow citizens, the American people can be assured that a step has been taken in the direction of accountability and fairness in Washington,” he said.

Copyright 2012 ABC News Radio

ABC News Radio