RI GOV CHAFEE GETS A GOV'T PENSION AT 62 (in 2015) DUE TO SERVING THE REQUIRED 5 YEARS AS US RI SENATOR
Since our Rhode Island Governor, Lincoln Chafee has presented a pension bill along with the General Treasurer Gina Raimondo to the State Assembly and it requires the state to break contracts with current retired public workers, I was interested to look up about Lincoln Chafee's pension that he will receive from our federal tax dollars.
What the elected politicians change in the pension plan this time, is no guarantee that this will be the final change, the final take aways from the contract current retirees signed with the state of Rhode Island. Ask any Native American about government treaties. Broken treaties/contracts never benefit both sides, but only one side.
How good is a contract with a government?
Lincoln Chafee, current Governor of the state of Rhode Island
US Senator from November 2, 1999 to January 3, 2007
Mr. Chafee was a US Senator: 7 years and 2 months
Date of birth: March 26, 1953
58 years old
Lincoln Chafee's last three year's of salary as US RI Senator:
$485,400 divided by 3, which is the average of his last three years US Senator salary = $161,800 x 80% = $129,440
Since I am not taking the time to understand the full 16 page report to figure out how much Lincoln Chafee will receive in his US Senator pension after serving 7 years and 2 months, I don't know how much of $129,400, he will receive in his government pension as a federal public employee representing us from Rhode Island. But he gets social security and medicare benefits, if he has the quarters, as he paid in, as a US RI Senator. And COLA is explained in the report on page 11, The COLA text is copied and pasted below.
Here are the facts about US Senators and Representatives Pensions. Source pdf file Congress+pension+plan
Members of Congress are eligible for a pension at age 62 if they have completed at least five years of service. They are eligible for a pension at age 50 if they have completed 20 years of service, or at any age after completing 25 years of service. The amount of the pension depends on years of service and the average of the highest three years of salary. By law, the starting amount of a member’s retirement annuity may not exceed 80 percent of his or her final salary.
Read the full report that provides more detail on retirement benefits for members of Congress. (This is 16 pages, including the COLA on page 11). From this report in the summary is where the following paragraph was taken:
As of October 1, 2006, 413 retired Members of Congress were receiving federal
pensions based fully or in part on their congressional service. Of this number, 290
had retired under CSRS and were receiving an average annual pension of $60,972.
A total of 123 Members had retired with service under both CSRS and FERS or with
service under FERS only. Their average annual pension was $35,952 in 2006.
About US Congress people and their Social Security
Is it true that . . . Members of Congress do not pay into Social Security and when they retire they receive a pension equal to their congressional salary for the rest of their life?The answer is no. All members of Congress pay Social Security taxes in the same amounts as they would if they were employed in the private sector at the same salary level. The amount of a congressional pension varies and depends on years of service, age at the time of retirement, and salary.
The facts: The confusion about Social Security probably results from the fact that before 1984, Senators and Representatives did not participate in the Social Security program. Like all federal government employees at that time, members of Congress were covered by a pension plan, called the Civil Service Retirement System (CSRS), that did not require payment of Social Security taxes and did not provide Social Security benefits. In 1983, Congress passed a law (P.L. 98-21) that required all federal employees first hired after 1983 to participate in Social Security. The law also required all members of Congress to participate in Social Security as of January 1, 1984, regardless of when they first entered Congress. Because the CSRS was not designed to coordinate with Social Security, Congress directed the development of a new retirement plan for federal employees, called the Federal Employees Retirement System (FERS), which does coordinate a federal pension with Social Security.
COLA (from page 11 of the report)
Cost-of-Living Adjustments. CSRS annuities are adjusted for inflation
once each year on the same schedule and by the same percentage as Social Security
benefits. These “cost-of-living adjustments,” or COLAs, are based on the rate of
increase in the Consumer Price Index for Urban Wage Earners (CPI-W). CSRS
annuities and Social Security benefits are increased each January by the percentage
change in the CPI-W over the 12-month period ending on the preceding September
30. FERS annuities also are adjusted for inflation, but as a cost-control measure,
Congress has mandated that FERS annuities will increase by less than the percentage
change in the CPI-W whenever the annual rate of increase in that index exceeds
2.0%. If the CPI-W rises by 2% or less, FERS annuities are increased by the same
percentage as the increase in the CPI. If the CPI rises by 2.1% to 3%, FERS
annuities are increased by 2%. If the CPI rises by more than 3%, FERS annuities are
increased by one percentage point less than the rate of increase in the CPI.
Initial CSRS annuities may not exceed 80% of a Member’s final pay. Over
time, however, if Congressional pay were to remain unchanged, a retired Member’s
CSRS pension could exceed the nominal amount of his or her final pay.
Nevertheless, because COLAs merely prevent the purchasing power of an annuity
from being eroded by inflation, the real value of a CSRS pension does not increase
or decrease during retirement, provided that the price index on which the COLA is
based is an accurate measure of the rate of inflation.