Almost 15,000 federal retirees, including former members of Congress, enjoy six-figure pensions right now. And if that isn’t galling enough? The pension system providing these cushy payouts is ridiculously insolvent, facing a $674.2 billion shortfall.
So much for cutting pork and careless spending out of Washington. I guess politicians only use that philosophy when it doesn’t apply to themselves.
To be clear, not all federal retirees get a mammoth payday. Some folks were middle managers who now get a relatively modest retirement at an average of abour $31,000 annually. But a small group – about one of every 125 retirees (civilians mind you, not the military) collects more than $100,000 in benefits annually.
Oh, and former House speaker and current presidential candidate Newt Gingrich is in that pleasant group, according Bloomberg News information retrieved under the federal Freedom of Information Act.
Considering the state of private retirement plans right now, with out-of-work Americans drawing down savings and many 401k plans still crippled by market volatility in the wake of the financial crisis, that kind of largess in the face of yawning shortfalls is not just politically incorrect – it’s pretty offensive.
Uncle Sam is cutting jobs, not creating them – and while we can debate the scope and purpose of federal government, I think everyone will agree that amid deep deficits there need to be some changes. Some are talking about big changes to Social Security to rein in spending, including the prospect of benefit cuts or an increase to the retirement age.
It’s time to consider changes to this pension system, too.
After all, public employees at the state and local levels already have faced moves to cut future benefits due to similar problems. The number of current federal employees eligible to retire and collect a pension will grow to 956,613 by the end of the 2016 budget year, a 35% increase according the Office of Personnel Management.
If Congress is serious about reining in spending, a good place to start would be its own unsustainable retirement system. That isn’t just a necessity, but also a good way for our politicians to experience the hard and personal decisions that normal Americans face every day.