Congressional Pension: Eligibility, Calculation, and Taxes

A congressional pension is a federal annuity paid to former members of Congress under one of two government retirement systems. The amount depends on three things: the member’s highest three-year average salary, their total years of creditable service, and an accrual rate that differs sharply based on when they first entered federal service. A rank-and-file member who entered before 2013, earned a $174,000 salary, and served 20 years would draw roughly $59,160 a year. A member who entered in 2013 or later, with the same salary and service, would draw about $38,280.

Which Retirement System Covers a Member

Two systems are in play. The Civil Service Retirement System (CSRS) is the older defined-benefit program and now covers only a small, shrinking group of members who began government work before 1984. The Federal Employees Retirement System (FERS) covers everyone who entered federal service in 1984 or later, which is virtually all current members.¹

FERS was designed as three stacked benefits: a pension annuity, Social Security, and the Thrift Savings Plan (the federal 401(k)) with government matching. CSRS members, by contrast, generally do not pay Social Security tax on their congressional pay, so the CSRS annuity is intended to carry most of the retirement load on its own. They may put money into the TSP but receive no matching contributions.²

What Members Pay Into the Pension

Members are not getting the annuity for free. A percentage of every paycheck is deducted toward the pension, separate from Social Security and Medicare taxes. The rate depends on when the member was hired, and newer members pay substantially more:

CSRS members: 8.0% of salary toward the annuity, plus the 1.45% Medicare tax. No Social Security tax on congressional pay.
FERS members who entered before 2013: 1.3% of salary toward the annuity, plus 6.2% Social Security and 1.45% Medicare.
FERS-RAE members (first hired in 2013): 3.3% toward the annuity, plus Social Security and Medicare.
FERS-FRAE members (first hired in 2014 or later): 4.4% toward the annuity, plus Social Security and Medicare.

Those steeper contributions for newer members came out of the Middle Class Tax Relief and Job Creation Act of 2012 and the Bipartisan Budget Act of 2013. A member hired in 2020 pays more than three times what a pre-2013 colleague pays into the pension fund on the same salary.

When a Member Can Start Collecting

No pension is paid until the member is vested, which takes at least five years of creditable civilian service. A single two-year House term is not enough. A member who leaves before hitting five years can get a refund of their own contributions, but no annuity.

Once vested, FERS offers three paths to a full, unreduced annuity:

Age 62 with at least 5 years of service
Age 50 with at least 20 years of service
Any age with at least 25 years of service

A member who leaves earlier does not forfeit the benefit. Someone who departs at 45 with six years of service simply waits until age 62 to start drawing.³

There is also a reduced-annuity option. A member who retires at their Minimum Retirement Age with at least 10 years of service can start collecting earlier, but the pension drops 5% for every year they are under 62. The MRA itself depends on year of birth: 55 for anyone born before 1948, rising on a sliding scale to 57 for anyone born in 1970 or later.⁴ A member who retires at 56 instead of 62 under this rule cuts the annuity by 30%.

How the Annual Pension Is Calculated

The formula multiplies three numbers: the high-3 average salary, years of creditable service, and an accrual rate. The high-3 is the highest average annual pay the member earned during any three consecutive years. The accrual rate is where the system splits in two.³

FERS Members Who Entered Before 2013

These members get an enhanced accrual rate of 1.7% of the high-3 salary for each of the first 20 years of congressional service, then 1.0% for each additional year.⁵ The standard FERS rate for most federal workers is 1.0% (or 1.1% if they retire at 62 or later with at least 20 years), so the congressional rate during those first two decades runs about 70% higher.

Worked example. A pre-2013 member with 20 years of service and a $174,000 high-3 salary:

$174,000 × 1.7% × 20 years = $59,160 per year

By statute, no starting annuity under FERS or CSRS may exceed 80% of the member’s final salary.

FERS Members Who Entered in 2013 or Later

Congress scrapped the enhanced rate for newer members. Under 5 U.S.C. § 8415(d), anyone classified as a revised annuity employee or further revised annuity employee uses the ordinary federal formula: 1.0% per year, or 1.1% per year if they retire at 62 or older with at least 20 years of service.⁵ Same 20 years, same $174,000 high-3:

$174,000 × 1.1% × 20 years = $38,280 per year

About $21,000 less than the pre-2013 version. Newer members pay more into the fund and take home a smaller annuity, a deliberate step to bring congressional benefits closer to the general federal workforce.

CSRS Members

The remaining CSRS members use the most generous rate of all: 2.5% per year for each year of congressional service. Because they do not get Social Security through their congressional pay, the pension is built to be the dominant income source, and over a long career the starting annuity can approach the 80% cap.³

Cost-of-Living Adjustments After Retirement

Pension payments adjust for inflation, but FERS and CSRS use different rules. CSRS retirees get the full Consumer Price Index increase each year. FERS retirees get a capped version:⁶

CPI of 2% or less: FERS retirees get the full CPI.
CPI between 2% and 3%: FERS retirees get 2%.
CPI above 3%: FERS retirees get CPI minus 1 percentage point.

Over decades, that gap compounds. Two retirees who start with identical pensions, one under CSRS and one under FERS, will slowly drift apart as FERS adjustments trail actual inflation.

There’s also a timing rule. Most FERS retirees get no COLA at all until they turn 62, even if they retired earlier. Disability retirees and survivors are the main exceptions.⁷ A member who takes the age-50-with-20-years deal could go 12 years with no inflation adjustment on the pension.

Social Security and the Thrift Savings Plan

FERS members pay Social Security taxes on their congressional salary and earn benefits on the standard formula. Those benefits are paid on top of the FERS annuity, not instead of it.

The Thrift Savings Plan is the third leg. Members contribute from each paycheck in traditional or Roth dollars, and the government adds an automatic 1% of basic pay whether the member contributes or not, then matches dollar-for-dollar on the next 3% and fifty cents on the dollar on the 2% after that. A member who puts in at least 5% of pay gets an effective 5% match.⁸ For 2026, the IRS elective deferral limit is $24,500. Members 50 and older can add $8,000 in catch-up contributions, and those aged 60 through 63 get a higher catch-up of $11,250 under SECURE Act 2.0.⁹

Survivor Benefits

Two sets of rules apply, depending on whether the member dies in office or has already retired.

If a FERS-covered member dies after at least 18 months of civilian service, the surviving spouse gets a basic employee death benefit: 50% of the member’s final annual salary (or average salary, if higher) plus a flat dollar amount adjusted yearly for inflation. For deaths after December 2025, that flat amount is $43,800.53.¹⁰ The spouse can take it as a lump sum or in 36 monthly installments. If the member had completed at least 10 years of service, the spouse also gets a continuing annuity equal to 50% of what the member’s pension would have been, on top of the basic death benefit.¹¹

A retiring member can also elect a survivor annuity, which continues pension income to the spouse after the member’s death. It is not free. Under FERS, electing the maximum survivor benefit (50% of the unreduced annuity to the spouse) cuts the member’s own pension by 10% for life. A partial 25% survivor benefit costs a 5% reduction. Under CSRS the maximum is 55% of the unreduced annuity, with the member’s pension reduced by 2.5% of the first $3,600 and 10% of anything above that. A member who waives the survivor annuity at retirement generally cannot add one later, and spousal consent is required to waive it.

Forfeiture for Felony Convictions

Federal law can wipe out a congressional pension. Under 5 U.S.C. § 8332(o) for CSRS and 5 U.S.C. § 8411(l) for FERS, a final conviction for certain felonies related to the member’s official duties erases all service credit earned as a member of Congress. The convicted member is disqualified from any annuity based on that service.¹²

The covered offenses include bribery, acting as an agent of a foreign government, conspiracy to defraud the United States, wire and honest-services fraud, money laundering, obstruction of proceedings before Congress, witness tampering, and RICO offenses, among others. Every element must have taken place while the person was serving as a member, and the conduct must directly relate to official duties. Forfeiture reaches only the congressional service: the convicted member still gets a lump-sum refund of their own contributions, and any creditable service earned in other federal positions is unaffected. If the conviction is overturned on appeal, the forfeited benefits are restored.

How Pension Income Is Taxed

Congressional pension payments are subject to federal income tax, but not every dollar is taxable. Because members paid their contributions with after-tax money (the 1.3%, 3.3%, 4.4%, or 8% deducted from each paycheck), part of each monthly payment is a tax-free return of those contributions. The rest is taxed as ordinary income.¹³

The tax-free share is figured using the IRS Simplified Method for annuities that began after November 18, 1996. The amount excluded over a lifetime can never exceed what the member actually contributed. Once that total has been recovered tax-free, every subsequent payment is fully taxable. If the retiree dies before recovering the full contribution amount, the unrecovered balance can be claimed as an itemized deduction on the final return.¹³

State treatment varies. Some states exempt federal pension income entirely, some give partial exclusions tied to age or income, some tax it like any other income, and a few have no income tax at all.

1
Federal Register. Retirement: Members of Congress and Congressional Employees
2
U.S. Office of Personnel Management. CSRS Information
3
U.S. Office of Personnel Management. Computation
4
U.S. Office of Personnel Management. Eligibility
5
Office of the Law Revision Counsel. 5 USC 8415 – Computation of Basic Annuity
6
U.S. Office of Personnel Management. How is the Cost-of-Living Adjustment (COLA) Determined
7
U.S. Office of Personnel Management. Learn More About Cost-of-Living Adjustments (COLA)
8
The Thrift Savings Plan (TSP). Contribution Types
9
The Thrift Savings Plan (TSP). 2026 TSP Contribution Limits
10
U.S. Office of Personnel Management. Survivors
11
eCFR. Federal Employees Retirement System – Death Benefits and Employee Refunds
12
Office of the Law Revision Counsel. 5 USC 8411 – Creditable Service
13
Internal Revenue Service. Tax Guide to U.S. Civil Service Retirement Benefits (Publication 721)