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How do different retirement systems (CSRS vs FERS) affect congressional pension benefits?
Executive summary
CSRS generally yields larger defined‑benefit annuities and no Social Security credits, while FERS is a three‑part system with a smaller basic pension plus Social Security and the Thrift Savings Plan (TSP); for example, the average monthly CSRS benefit was about $5,700 vs. $2,300 for FERS in FY2024 [1] and CSRS can produce a 56.25% replacement for 30 years’ service under the CSRS formula [2]. Members of Congress have special accrual rules under both systems—CSRS (or CSRS Offset) produces higher accruals, while FERS congressional accruals were 1.7% per year for the first 20 years and 1.0% thereafter for those covered before 2013 [3] [4].
1. Pension architecture: guaranteed pension vs. layered retirement
CSRS is essentially a legacy defined‑benefit pension that pays a single annuity for life and does not include Social Security coverage for most enrollees, so its formula produces higher replacement rates [5] [2]. FERS, by contrast, was created as a three‑part program combining a smaller defined‑benefit annuity with Social Security and the TSP defined‑contribution plan; the lower FERS accruals reflect that Social Security benefits and TSP savings supplement the smaller basic FERS pension [5] [6].
2. How benefit formulas differ in practice
Under CSRS the accrual formula can yield a high replacement rate—for example, a 30‑year CSRS employee’s pension can equal about 56.25% of the high‑three average pay [2]. Under FERS, accrual rates are generally lower because employees earn Social Security; for Members of Congress and some staff first covered by FERS before 2013, the congressional accrual was 1.7% per year for the first 20 years and 1.0% thereafter [4] [3]. CRS reporting and OPM computation guidance show those specific percentages apply to congressional service computations [7] [3].
3. The numbers: average payouts and cost implications
Recent budgetary analysis highlights a large gap in average benefits: CBO estimated CSRS annuitants averaged about $5,700 per month in FY2024, while FERS annuitants averaged about $2,300 per month—reflecting the older, richer CSRS cohort and the smaller FERS basic annuity [1]. OPM and budget documents also note that FERS financing is split across the basic annuity, Social Security, and TSP, which affects contribution rates and “normal cost” calculations [6].
4. Cost‑of‑living and indexing: CSRS vs. FERS outcomes
COLAs are handled differently: CSRS annuities generally receive full CPI‑W adjustments, while FERS COLAs are limited by formula and eligibility (for example, nondisabled FERS retirees under age 62 may not receive the COLA immediately), so recent guidance projected a 2.8% CSRS COLA vs a 2.0% FERS COLA for the same CPI increase period [8]. That difference can widen long‑term gaps between CSRS and FERS retired pay.
5. Special categories and congressional exceptions
Not all employees are treated the same: law enforcement officers, firefighters, and some congressional personnel have enhanced accrual rates (e.g., 2.5% for the first 20 years under CSRS for some LEO/firefighter categories), and they make higher contributions [4] [9]. Members of Congress and staff historically could be under CSRS, CSRS Offset, FERS, or Social Security alone; transitional rules and the 2013 change altered accrual rates and eligibility for newer members [10] [3].
6. Tradeoffs and what it means for members of Congress
The practical tradeoff is guaranteed pension size versus diversified retirement income: CSRS gives a larger government‑paid pension but typically no Social Security credits; FERS reduces the government annuity but combines Social Security and TSP, shifting some reliance to market returns and Social Security rules [5] [6]. For Members of Congress this means long‑serving CSRS members historically received substantially larger average pensions than FERS members—CRS data show retired Members under CSRS had higher average annual pensions than those under FERS in recent snapshots [10] [3].
7. Areas the available reporting does not cover or where details vary
Available sources do not mention every procedural detail—such as precise annuity examples for every congressional tenure permutation or the post‑2013 election age‑and‑service exceptions beyond the cited accrual rates—so readers should consult OPM or the specific CRS report for case‑by‑case calculations (not found in current reporting; [3]; [5]1). Also, while averages and formulas are cited, individual outcomes depend on “high‑three” pay, years of service, age at retirement, offsets, and TSP performance, which vary by person [2] [7].
Conclusion: CSRS favors a larger, simpler defined benefit paid by the government; FERS shifts to a blended model with a smaller guaranteed annuity plus Social Security and TSP. For congressional pensions, historical CSRS coverage produced higher average pensions, while FERS congressional accrual rules produce lower basic annuities but add Social Security and TSP components [1] [3] [6].