Devil in the Details

According to U.S. Department of Labor statistics, Enron workers lost between 70 and 90 percent of their retirement plans as the company's stock collapsed. Cumulatively, workers lost more than a billion dollars in retirement assets. The ensuing outrage has thrust pension reform onto the political agenda. President Bush has advanced a plan that would expand workers' rights to cash in on their company's stock options and encourage companies to provide professional investment advice to employees. Meanwhile, Democrats Barbara Boxer and Jon Corzine are calling for a 20 percent limit on the amount of company stock workers can apply to pension plans.

For the public at large, the mistreatment of Enron employees is perhaps the single most outrageous aspect of the entire scandal. This is largely because most middle class working Americans have various retirement arrangements themselves, and can sympathize directly with Enron workers. But The American Prospect couldn't help wondering whether members of Congress who will be considering the issue of pension reform might also look at Enron employees and think: "There but for the grace of God. . ."

A survey of congressional pension plans suggests that the answer is "probably not." After 20-25 years of service, a member of Congress can retire with up to 80 percent of his or her final salary replaced. Moreover, congressional pension benefits are 2 to 3 times better than what someone making roughly the same salary could expect to receive after retiring from the private sector.

Past presidents have gotten an even sweeter deal. On top of a $157,000 annual pension, the fiscal year 2001 budget called for $2.5 million for staff salaries, office space, and other costs for presidents Gerald Ford, Jimmy Carter, Ronald Reagan, George Bush and Bill Clinton. All of which suggests a possible alternative avenue for federal pension reform in these tight-budget times. . .