During his 25 years in office, U.S. Rep. Howard Coble has refused to participate in the pension plan for congressmen.
He’ll tell you, it was the worst financial decision he ever made.
If Coble retired today ó he plans to run for re-election to his 14th term in 2010 ó he thinks he would have drawn a pension of $65,000 to $68,000 a year. That’s not chicken feed, yet something Coble, to his credit, has turned his back on.
“It’s the Cadillac of all pension plans, no doubt about it,” says Coble, the Guilford County Republican.
To make matters worse for Coble, by declining the pension, he will not be covered by the congressional health plan once he leaves office.
Again, “not my most brilliant” money move, he says.
Coble, 78, is not looking for a pity party. When he retires or voters boot him out, he will have his Social Security and a Coast Guard retirement, though his congressional pension would have been three times greater. He also has done some financial planning on the side for his retirement years.
“Hopefully, the wolf won’t be at my door,” he says.
How many other congressmen have refused the pension plan?
Coble says he isn’t sure, but he thinks only he and Rep. Ron Paul, R-Texas, have turned it down.
Before 1984, members of Congress were covered by a separate pension plan called the Civil Service Retirement System. Congress later directed the development of a new retirement plan, the Federal Employees Retirement System.
Members elected in 1984 and later ó Coble was elected in 1984 ó are covered automatically under FERS, unless they refuse to participate. Longer-serving congressmen could remain in the old system or change their coverage to FERS.
The Congressional Research Service reported last year that as of Oct. 1, 2007, 435 members of Congress were receiving federal pensions based fully or in part on their congressional service.
Of that number, 286 had retired under the Civil Service Retirement System and were receiving an average annual pension of $63,696.
The researchers said 149 members had retired with service under both the Civil Service Retirement System and the Federal Employees Retirement System, or with service under the FERS only.
Their average annual pension was $36,732 in 2007.
Members of Congress are eligible for a pension at 62, if they have been in office at least five years. Members are eligible for a pension at 50, if they have completed 20 years of service and at any age after completing 25 years, such as Coble.
The amount of the pension depends on years of service and the average of the highest three years of salary. By law, the retirement annuity of a congressman may not exceed 80 percent of his or her final salary.
Congressmen make $174,000 a year.
The Congressional Research Service said congressional pensions were designed to provide a larger benefit for each year of service “because of the uncertain tenure of congressional service.”
Another retirement savings extra available to congressmen is the Thrift Savings Plan, a 401(k) type of plan in which participants can deposit up to a maximum of $16,500 a year and have a federal match up to 5 percent of their pay.
Coble has declined the Thrift Savings Plan, too.
Over his time in Congress, Coble has had two opportunities to change his mind and join the pension plan. He refused. A former state legislator, he also rejected the N.C. pension.
Coble said he came to believe that taxpayers who pay the salaries of state and federal lawmakers should not be saddled with financing their retirements, too.
“I just made it clear, I won’t accept it,” he says.
When Coble was in the General Assembly in 1983 before running for Congress, he was attending a political reception when someone walked up to him and asked whether he was familiar with the congressional pensions.
The man described the pensions going to congressmen as “obscene, those were his words,” Coble says. He encouraged Coble to investigate what four members of Congress ó then House Speaker Carl Albert of Oklahoma, Sen. Robert Byrd of West Virginia, Sen. Albert Gore Sr. of Tennessee and Sen. Jesse Helms of North Carolina ó would receive when they left Congress.
Coble also had a reporter connection in Washington trying to investigate congressional pensions and discovered that the information was protected as though it were housed in Fort Knox.
Coble arrived in Washington in 1985, immediately declined the pension plan and, in his first few terms in Congress, routinely introduced bills to eliminate the pension plan altogether or at least make the member pensions equivalent to other federal employees.
Coble especially disagreed with a member of Congress being vested in the pension plan after only five years of service. He says it should be at least 12 years, which would represent six terms for a House member and two terms for a senator.
He could find few co-sponsors for his bills and eventually gave up.
“It’s not going to change,” Coble says. “I would be tilting at windmills if I tried this every year.”
Coble has never made a particularly big deal about his refusal of the congressional pension plan. This column was my idea, not his. “I’m not a show horse,” he says.
A political opponent made a pretty good joke at Coble’s expense one election season after someone in a Guilford College crowd praised the congressman’s stand on the pensions.
Naturally, Coble is not going to take a pension, the opponent said, because he’ll never retire.
Coble still enjoys telling that one.