(Bloomberg News) Almost 15,000 federal retirees, including former leaders of Congress, a university president and a banker, are receiving six-figure pensions from a system that faces a $674.2 billion shortfall.
About one of every 125 retired federal civilian workers collects more than $100,000 in benefits annually. They include physicians, postal workers and presidential candidate Newt Gingrich, according to data obtained by Bloomberg News under the federal Freedom of Information Act.
"We don't want to bash federal employees," said Jim Kessler, vice president for policy at Third Way, a Washington- based research organization. "Still, when you have today's economy, public sector jobs look better and better. And there are some pensions that make you question the system as a whole."
About half of all private-sector workers have no retirement plan other than Social Security, according to figures from the Employee Benefit Research Institute, a Washington-based nonprofit that studies pensions. About 16 percent are in plans similar to the federal system, which guarantees payouts based on workers' earnings. Some private employers offer so-called defined-contribution plans, including 401(k) plans, in which benefits depend on employees' contributions and how they're invested.
The federal retirement system has emerged as a cost-cutting target as the government faces a budget deficit exceeding $1 trillion. A 2010 Congressional Research Service study reported that U.S. government pension programs had a shortfall of $674.2 billion, mostly due to insufficient funding for workers hired before 1984.
Employee Contribution
The U.S. Treasury pays about $4.9 billion every month for about 1.8 million retirees, an average of $31,633 annually. Federal employees contribute $1 of every $14 toward retirement, according to the National Commission on Fiscal Responsibility and Reform, a bipartisan panel created by President Barack Obama.
Public employees at the state and local levels already have faced moves to cut future benefits, as officials seek to address a cumulative pension gap that exceeds $4 trillion. Dallas Salisbury, president of the benefits institute, said in an interview that federal pensions might be "richer than we can now afford. Something's going to have to give."
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 percent increase from the 707,750 who could have retired at the end of September, according to a 2008 study by the Office of Personnel Management.
Roughly 27 Years
Retirees in the database that OPM released to Bloomberg News had careers that lasted an average of roughly 27 years. The database is dated Sept. 29, 2011, and doesn't contain the names of employees' survivors who receive benefits. The Congressional Budget Office said in a report last March that in 2010, the U.S. government paid $69 billion to 2.5 million civilian retirees and their survivors, and $51 billion to 2.2 million military retirees and their survivors.