U.S. Rep. Mike Coffman (R-CO), former state treasurer of Colorado, announced he will introduce legislation after the scheduled August recess that would put an end to the defined-benefit retirement plan currently available to members of Congress.
“I’m a Marine Corps combat veteran and I was taught that you should never ask others to do anything that you would be unwilling to do,” Coffman said. “These are extremely difficult economic times and Congress needs to set an example and lead the way for the country. I think this is a good start.”
The defined benefit retirement plan is a pension that gives members of Congress an averaged percentage of their annual salary (currently $174,000) for every year they serve in Congress. To be eligible for the retirement plan they must first serve at least five years. They will then receive 1.7% for every year up to 20 that they serve in Congress, and 1% for every year after 20. For example, if a member of Congress served for 20 years, and they were at least 62, he or she would receive 34% of their salary, or $59,160, per year based on the current salary.
Members of Congress pay 1.3% of their salary into the pension plan and are required to pay into Social Security at the same rate as everyone else. They may contribute to a 401(K) plan that has a match similar to many private sector plans. Coffman’s legislation would honor any retirement benefits accrued prior to the passage of his bill, and keep the Social Security and 401(k) plan in place.
In January, Coffman introduced House Resolution 270 that would cut Congressional pay by 10%, reduce congressional office budgets, and require federal civilian employees to take a non-consecutive, two week furlough in 2012. An exception is provided in the bill for national security or reasons related to public safety, including law enforcement.
At the beginning of this Congress, Coffman and the new Republican majority insisted on a 5% office budget cut. Congress has also acted to prevent any pay raises for themselves since 2008; consequently, the last adjustment of Member pay was an increase of 2.8% on December 18, 2008. This was before Coffman came to Washington, and was done at the same time as the most recent Social Security Cost of Living Adjustment (COLA). Although he disagreed with the overall proposal, Coffman supported the successful effort to ensure that Members of Congress must be included in any healthcare reform, so those who advocated for this proposal also had to deal with the consequences.