Congressional Retirement Benefits Axed: New Bill Ends Pensions for Future Lawmakers

The "Citizen Legislature Anti-Corruption Reform of Public Service Act," or CLEAN Public Service Act, is shaking up how Congress gets paid after they leave office. Here's the deal: This bill stops future retirement benefits for Members of Congress under the two main federal pension systems (CSRS and FERS) starting 90 days after it's enacted.

Pensions, No Pensions

This section of the bill is all about cutting off future retirement benefits. If you're a Member of Congress, no new money from the government will go into your retirement accounts under CSRS or FERS, and nothing more will be deducted from your paycheck for these plans. But, if you've already earned retirement benefits, those are safe. Think of it like a company freezing its pension plan – existing benefits are protected, but no new ones are being added. This change doesn't kick in immediately; it takes effect 90 days after the bill becomes law (SEC. 2).

If you are a member of Congress, you still get to participate in the Thrift Savings Plan (TSP). The TSP is like a 401(k) for federal employees, where you can contribute your own money and get some matching funds (up to a limit). One interesting exception: the Vice President is not affected by any of this. Also, if you're a Member of Congress with less than five years of service, you can get a refund of the money you've already put into the system (SEC. 2).

Real-World Impact

Imagine a small business owner, Sarah, who's been contributing to her 401(k) for years. Suddenly, the company changes its policy, and while her existing 401(k) is safe, there are no more employer contributions. That's similar to what's happening to Members of Congress. They keep what they've earned, but the guaranteed pension benefit going forward is gone. They'll have to rely more on their own savings and the TSP, just like many private-sector workers.

The Big Picture

This bill is designed to make Congress more like the "citizen legislature" it's supposed to be, rather than a career with guaranteed perks. The long-term idea is to save taxpayer money by reducing the government's pension obligations. However, there are potential downsides. For example, Members of Congress might look for other ways to boost their compensation, or the lack of a pension might discourage some qualified people from running for office. It might incentivize more focus on personal wealth accumulation while in office, potentially leading to other issues.

It's also worth noting the exception for the Vice President. While there might be legal or constitutional reasons for this, it creates a two-tiered system, which some might see as unfair. It also raises a question of why the VP gets different treatment. The bill's sponsors haven't publicly commented, as this analysis is based solely on the initial bill text.