Get rid of them. Period.
Politicians should not be allowed one thin dime of pension unless it is available to every other American. In other words – Social Security. No more.
Now I'm not against saving a part of your salary, to provide for yourself in your golden years, when you'll have to start paying your own greens fees and quit putting it on the company plastic. Or the government's plastic.
So it's OK with me if Congress has a 401(k) plan for its members. Let 'em shelter a bit of the take from the tax man, just like the rest of us would that be self-defense? just askin' .
But – and here's where I may differ with the other 99 senators – there should be no employer matching. In the private sector employers carefully balance the total amount of wages they can afford to pay, based on the marginal productivity of the last wo/man hired (slipping into Econ 101 lingo here, please forgive), with the value employees place on various fringe benefits.
Did you want that in English?
If employees value, let's say, subsidized day care more than they value cash, then the employer gives them subsidized day care and reduces the cash he pays them by exactly the same amount. Walk through all the non-cash benefits and the analysis is more or less the same for each of them. People like vacations? Reduce their pay and give them a vacation. Pre-paid greens fees? Christmas hams? Free coffee at work? Hand them out like candy, reduce their pay. And on and on and on, all the way through 'employer 401(k) matching.'
This works great in the private sector, and explains why some industries pay employees one way (think bankers – espresso machines in the office), and other industries pay employees in a different way (construction workers – free hard hats),
In the public sector all this careful balancing breaks down and goes to Hades. For two reasons. First of all Congress gets to vote on how much they pay themselves (does your boss let you do that?). Oh really … I wonder if this pay increase can get a majority vote … I'm thinking it can. Secondly there is no real penalty for Congress paying itself too much. It's not like the government is going to shut down oops. Or run out of money turn that printing press three more times Jones, the Senator has a house payment to make!.
Therefore I support giving Congress as few ways as possible to reward themselves with tax free perks. Let them get those when they are honestly employed like the rest of us … in the private sector … earning millions of dollars lobbying their old pals.