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A good friend of mine educated me that my previous forward to you
concerning SS was incorrect, and here's why:
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This is an urban legend that has been circulating on the internet for
a couple of years. It is not true. Read below.
* It is not true that Congressmen do not pay into the Social
Security fund. They pay into the fund just as everyone else
does.
* It was true prior to 1984 that Congressmen did not pay
into the Social Security fund because they participated in
a separate program for civil servants (the Civil Service
Retirement System, or CSRS), but that program was closed
to government employees hired after 1983:
In 1983, P.L. [Public Law] 98-21 required Social Security coverage for
federal civilian employees first hired after 1983 and closed the CSRS
[Civil Service Retirement System] to new federal employees and Members of
Congress. All incumbent Members of Congress were required to be covered
by Social Security, regardless of when they entered Congress. Members who
had participated in CSRS before 1984 could elect to stay in that plan in
addition to being covered by Social Security or elect coverage under an
'offset plan' that integrates CSRS and Social Security. Under the CSRS
Offset Plan, an individual's contributions to CSRS and their pension
benefits from that plan are reduced ('offset') by the amount of their
contributions to, and benefits from, Social Security."
* It is not true that Congressmen "continue to draw their
same pay, until they die." The size of their pensions is
determined by a number of factors (primarily length of
service, but also when they joined Congress, their age at
retirement, their salary, and the pension option they chose
when they enrolled) and by law cannot exceed 80% of their
salary at the time of their retirement.
* The figures given as an example for Senator Bradley
($7,900,000 over the course of his and his wife's lifetime,
culminating in a top payout of $275,000) are simply
outrageous amounts with no basis in reality. There is no
conceivable way Senator Bradley could draw anywhere
near that amount of money though his pension plan.
* It is not true that Congressmen "paid nothing in on any
kind of retirement," and that their pension money "comes
right out of the General Fund." Whether members of
Congress participate in the older Civil Service Retirement
System or the newer Federal Employees' Retirement
System (FERS), their pensions are funded through a
combination of general tax provisions and contributions
from the participants. Right now, members of Congress
in the FERS plan must pay 1.3% of their salary to FERS and
6.2% in Social Security taxes.
* As of 1998, the average annuity for retired members of
Congress was $50,616 for those who retired under CSRS
and $46,908 for those who retired under FERS. Not bad,
but not the highway robbery this piece makes it out to be.
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