By Marie Ardito
Co-founder, MA Retirees United (www.retireesunited.org)
There is no topic I have written on more in this column than the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) that are attached to Social Security for those of us working in the public sector in some 15 states.
According to the Social Security Fairness Group of California (SSFG), many active employees are entirely unaware of these penalties and retire not realizing that, if they have carried a second job in their working career to build up Social Security, they may only get a reduced amount. Also, those who are married and counting on collecting a spousal benefit probably will get nothing. SSGF is hoping active workers will join those of us who are retired in the fight for the repeal if they understand the implications to their own futures. They want all of us to get the unions and all leadership that represent us behind working to get these injustices repealed.
The GPO and WEP affect public employees in virtually every state; however, those states with the greatest impact are Alaska, California, Colorado, Connecticut, Illinois, Kentucky, Louisiana, Maine, Massachusetts, Missouri, Nevada, New Mexico, Ohio, Rhode Island, and Texas. These 15 states are known as "non-contrib" states, as those working in the public sector in these states do not contribute to Social Security in their primary job.
None of us had any say in contributing only to our pensions and not to Social Security in our teaching jobs. Not only that, but Social Security contributions have to be matched by an employer. Who would be the employer be in MA- the state or the community? Where would they get the money to pay half of our Social Security contributions? Not only don’t we pay now into Social Security but the chances of ever being allowed to are slim to none. As a result, we are basically hostages to something over which we have no control.<
SSFG asked me to explain that many current public employees still do not know about the offsets or only have a vague idea of their effects. In a recent study of active teachers in California, half of them did not know if they would be affected by the offsets. We rely on our worker associations to inform us. However, many of the people in union leadership and other one-career professionals know about the offsets, but they often are building large enough public pensions that the loss of Social Security retirement benefits does not seem to be a big an issue for them. They do not realize the devastation that can be caused to others by these offsets. Then, there is the issue of younger people believing that Social Security may disappear or be of minimal value to them when they retire. This is wrong. Benefits may be reduced if Congress does not implement some fixes, but they will be there.
The WEP says that if you have worked under Social Security and earned 40 units you will collect Social Security but it will be reduced by as much as half. In other words, you may collect only half of what you are entitled to but you will still collect Social Security. The GPO, on the other hand, is spousal benefit. If you are going to collect a public pension from one of the above states, you have an offset number. Your offset number is two-thirds of your monthly pension. So if your monthly pension is $3,000 a month your offset number would be $2,000. If half of your spouse’s Soical Security is $1200 a month, 1200-2000 is a negative number, so you will never collect any of your spouse’s benefits either as a spousal or survivor benefit. This is not right!
Not only are state workers affected by these two penalties, but also all Federal employees hired before 1984 are affected as well. Those workers hired after 1983 and covered by the Federal Employees' Retirement System pay into both a Federal pension and Social Security.Is it not strange that when the law was introduced regarding the penalties, the Federal government changed it so that new hires who would be collecting a Federal pension would start contributing to both to enable them to get both a pension and Social Security but those of us with a state pension were left behind? It is probably safe to assume that the members of Congress at the time made sure that they were protected.
According to a report of the Congressional Research Service published in April, 2014, there were 614,644 Social Security beneficiaries affected by the GPO. Of that number, 341,236 were spouses and 273,408 were widow (er)s. Of that number also, 451,785 received none of the spousal or survivor benefits and 162,859 had partially-offset status. This is not too large a number to be costly if the GPO is repealed and justice is done. An important bit of data is that 81% of those affected are women. This is definitely a women’s issue in addition to being a worker's issue.
According to the SSFG, there are just over 1.4 million affected by the WEP. Most of these people were never told by their employer or by the SSA at any time during their employment that they would lose the amount of money they do through this penalty.
Social Security was very solvent until the time that administrations began raiding the funds and using the money for things other than paying the benefits of those who had contributed. It was not until July of 2001 that House and Senate bills were filed for the complete repeal of both of these penalties. The present House version of the complete repeal of both the WEP/GPO is HR973. As of this publication, the bill has 115 co-sponsors. The Senate Bill is S1651. It currently has 16 Senators signed on.
Some think that if they retire to a state that is not in the above list, theywill not be affected. This is also incorrect. The penalty is attached to where the pension originates; not where you are living after retirement.
Another misconception is if you take an Option C and make your spouse the beneficiary of your pension, then you and he/she collects two-thirds of your pension, your spouse will lose some of their Social Security benefits. In actuality, the penalty applies only to the member - not the survivor - so the survivor can collect the MA pension and their full Social Security with no penalty.
Some also seem to think that, if they collect their pension in a lump sum instead of annuitizing it, they will not be affected. The truth is that, if you are vested, it does not matter how you take your pension. You are still under the penalties
According to the leadership of SSFG, the vast majority of those in Congress do not understand the penalties and how they affect us. I feel that the reason we do not have more citizens involved in the fight to repeal these two measures is that they are not educated on the effects of the penalties and why they are wrong. That is why I encourage you to go to the SSFG website (www.ssfairness.com) and educate yourself so that you can, in turn, educate and support others as well. Once people know what is at stake and what they can do, they wil be more likely to join the fight and to stick with it until justice is done
Those of you still working, please do the same. Don’t wait until you are a victim to correct what should never have happened. Make it a point to have your union leadership know this is very important to you and you want them involved in the effort. Please join with us now and together we WILL prevail!