Lawmakers have pension plans that are better than most private sector pensions. As a result, our elected officials are safely innoculated against much of whats been happening in the stock market in the past few weeks. We wouldn’t want them to acutely feel the pain of market gyrations–imagine if they were losing their shirts as the market tanked? What kind of goofy legislation would we get? However, we would like them to feel some pinch as our paper worth falls off a cliff and we face the prospect of working until we’re 100.
If only there were some way to send a message to lawmakers in the next week to let them know we’re frustrated…
AP: …But the blow is softer for members of Congress than for most. Although lawmakers have lost value in their thrift savings plans — the government’s version of a 401(k) — they are also offered a defined-benefit pension plan backed by the U.S. Treasury and largely insulated from Wall Street fluctuations.
That puts Miller and the other lawmakers into an increasingly privileged category — workers with guaranteed retirement benefits that aren’t subject to the vicissitudes of the financial markets.
Market meltdown or no, if [Rep. George] Miller, 63, were to retire at the end of this year he’d take with him an annual pension of about $122,000, according to the National Taxpayers Union, a nonprofit advocacy group in Arlington, Va. On top of that he could tap whatever remains in his 401(k)-like savings plan.
Lawmakers’ retirement benefits start earlier and accrue faster than in plans offered to other federal workers, or by the average private company. Lawmakers also get cost-of-living increases, increasingly rare in the private sector.
Only 5 per cent of private sector workers have defined benefit pension plans, in which the employer pays into an account and promises them benefits based on years of service, salary levels and other factors. That’s down from 1980, when 60 per cent of workers had such plans, according to the centre for Retirement Research at Boston College.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.