Educators fight unfair offsets that gouge retirement benefits | Education Votes

1 May

Imagine this. You’ve spent the last 30-years dedicating your life to teaching students Algebra at a local high school. And during those decades in the classroom, to help make ends meet, you’ve worked several part-time jobs—including a 15-year stint as a night auditor at a local hotel. But now, you’re looking forward to retirement—that is, until you learn about a government offset called the Windfall Elimination Provision (WEP), which is going to reduce your Social Security check by almost half.

While it sounds like a retirement nightmare, for hundreds of thousands of educators, police officers, fire fighters and other public service employees, it’s a reality. WEP penalizes people who have dedicated their lives to serving their communities by taking away benefits they have earned. It impacts public employees who work in what’s called, “non-Social Security states”—states where Social Security is not withheld from public sector employees. However, if these employees are eligible to collect a benefit as a result of private sector jobs they may have held, WEP robs them of a significant portion of their Social Security checks.

For example, if the retired teacher mentioned earlier–the one who worked part-time as a hotel night auditor–was eligible for a monthly Social Security benefit of $415 and received $1423 from her monthly teaching pension, under the WEP formula, her Social Security benefit would be reduced to $206. For those on a fixed income, that loss of $209 really hurts.

“I think I should be able to collect what I am due,” said Nancy Allen, a 62-year-old teacher from Alaska—a non-Social Security state—who retired four years ago and is eligible to collect Social Security based on several private sector jobs she held during college and after leaving the classroom.

I am not going to ever receive a large amount of Social Security because I didn’t put large amounts into the plan. But I did put money into the plan, I am eligible, and should be able to receive all that I am due.

The good news is that one of Allen’s U.S. Senators, Mark Begich (D-AK), is expected to introduce legislation later this week to repeal WEP. A similar bill–sponsored by Reps. Rodney Alexander (R-IL) and Adam Schiff (D-CA)–has already been introduced in the House. Both House and Senate versions will also target another offset that’s penalizing public employees in non-social security states. It’s called the Government Pension Offset, or GPO.

Because of GPO, 9 out of 10 public employees lose their entire Social Security survivor’s benefit, even though their late spouse may have paid Social Security taxes for years. In fact, some 300,000 people lose, on average, about $3,600 a year due to GPO—that’s an amount that can make the difference between self-sufficiency and poverty for those loved ones left behind.

“If you have a spouse and you’re Social Security is based on their benefit because they are deceased and you lose that benefit—that could really have a serious negative impact on people,” said Allen, who fears good educators and retired private sector employees looking at public education as a second career will steer clear of those states impacted by GPO/WEP. “I think the Social Security formula should be the same for everyone, and there shouldn’t be 15 states that are affected by this.”

But unfortunately, this problem is not just limited to the 15 non-Social Security states—Alaska, California, Colorado, Connecticut, Georgia, Illinois, Kentucky, Louisiana, Maine, Massachusetts, Missouri, Nevada, Ohio, Rhode Island, and Texas. Because people move from state to state, there are people impacted by GPO/WEP who live everywhere within the country, and that number continues to grow as more reach retirement age. However, thanks to federal lawmakers like Senator Begich and others, Allen sees a ray of hope extending from Capitol Hill.

“I feel good about what Senator Begich is doing,” said Allen. “Not everyone is willing to introduce a bill like this and I am very proud that Mark Begich feels he can do that.”

To find out more about GPO/WEP and other issues impacted educators, click here.

via Educators fight unfair offsets that gouge retirement benefits | Education Votes.

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