While extending the payroll tax cut through the end of last year, members of Congress last fall took what many feel was a long overdue whack at the cost of their retirement plan. They bumped up the rate at which federal employees contribute to their pension plan, saving an estimated $15 billion over the next 11 years.
They also made sure that none of the increase applied to themselves. Anyone in service before the law went into effect would pay into the pension plan at the old rate.
For all the talk you hear from Capitol Hill about running government more like a business, Congress has a retirement plan that would make any Fortune 500 executive blush. Members can retire younger, having contributed fewer of their own dollars, than almost any worker in the country — even more than the generous terms other federal workers get.
At a time when traditional pensions are disappearing and many workers are struggling to save for retirement, the Federal Employees' Retirement System (FERS), an old-school defined benefit pension program, pays 215 former congressmen and women an average of $39,576, for an average of 16 years of service, according to a recent Congressional Research Service report.
That's about what the average private-sector worker makes in retirement from all sources after a lifetime of work, according to the Employees Benefits Research Institute. The average income that worker gets from a pension is about $8,800 — if they have one. In 2010, fewer than 15 percent of private sector employees were enrolled in a defined-benefit pension.
"It's not keeping pace with what's happening in the private sector," said Veronique de Rugy, a senior researcher with George Mason University's Mercatus Center. "It's not sustainable."
(Read More: Latest GOP Budget Is Ambitious, Unlikely to Pass)
It's inaccurate, in fact, to refer a single retirement plan, since any senator or representative elected after 1986 has access to three: Social Security, a 401(k) program that matches 5 percent of their contributions up to $17,500, and FERS, which as the name implies covers anyone paid from the federal till.
FERS alone is a plan any U.S. worker would envy. As Jim Kessler, co-founder of the think tank Third Way and a former congressional aide, said, "It's not wrong to have three plans, but the matching is one-to-one for two of them and the other [FERS] is one-to-14."
(Read More: Despite Gains, Many Still Cut Spending)
As a result, all federal employees get a return on their FERS contributions at a rate that's almost double what other workers do. (See chart.) But thanks to a faster accrual rate granted to elected employees—how fast the value of their benefits pile up—members of Congress even get a higher percentage payout on FERS for the same time served than other federal workers do.