Examples of the WEP and GPO are given below
The American Federation of Teachers is endorsing a bill–the Public Servants Protection and Fairness Act–that would finally address an unfair offset to Social Security benefits for public employees receiving pensions–including school employee members of the Teacher Retirement System of Texas.
This offset, the Windfall Elimination Provision (WEP), reduces Social Security benefits of local, state, and federal retirees who worked in Social Security-covered employment and who also receive a government pension from their non-Social Security covered government employment. In other words, Texas school employees with TRS pensions who also worked in the private sector have long suffered with significant cuts to their monthly Social Security payments.
The bill, HR 4540 by Rep. Richard Neal (D-Massachusetts), would modify the current Windfall Elimination Provision (WEP) with a new formula for Social Security benefits and a “rebate” of $150 per month to current Social Security beneficiaries impacted by the WEP. While the bill isn’t a perfect repeal of the WEP, it is important to note that it is structured so that most retirees will see a gain in benefits and no retirees–either current or future–will be worse off (something that was a key flaw in previous legislation addressing the WEP). The bill also maintains the current exemptions from the WEP for individuals not receiving a pension and for those with 30 years or more of coverage under Social Security.
The bill does not address another harmful offset, the Government Pension Offset, which often eliminates all spousal and survivor benefits for public employees with pensions. You can read more about the GPO and WEP here. Texas AFT will continue to fight for what has long been termed “Social Security Fairness,” and we will keep you updated on this bipartisan bill, which although carrying widespread bipartisan support, still faces an uphill battle in an often gridlocked Congress. You can read more with examples of the impacts of WEP and GPO here. <link>
The vast majority of Texas teachers and other school employees work in school districts that long ago elected not to participate in the Social Security system. A shock awaits many of these teachers and other education employees when they retire. These education employees may think that they have qualified for full Social Security benefits, based on their own work for other employers who did take part in Social Security or based on their spouse’s work at a job covered by Social Security. However, when they retire, these educators find out that their Social Security benefits are cut—in some cases even eliminated because federal law deems their Texas Teacher Retirement System pension a “windfall” that justifies cutting their Social Security benefits.
Windfall Elimination Provision
Consider another case. This time, suppose the teacher qualified for Social Security benefits by working for another employer for 20 years before she went to work for the school district. Or suppose she worked at another job on evenings, weekends, and summers to qualify for Social Security. What happens when she retires from her job with a school district that doesn’t take part in Social Security? She faces a severe cut in her Social Security benefits because federal law contains the so-called Windfall Elimination Provision. Under this law, instead of receiving 90 percent of the first $856 of average monthly pre-retirement earnings, she receives only 40 percent. That’s a $428 cut in her expected monthly Social Security benefit.
Government Pension Offset
Consider the case of a widow eligible to receive a survivor’s benefit of $600 a month from Social Security. Suppose she retires from a school district that does not take part in the Social Security system and in her own right has earned a TRS pension of $900 a month. Federal law imposes a so-called Government Pension Offset that reduces her Social Security survivor’s benefit by two-thirds of the amount she receives from Texas TRS. That happens in this case to be a $600 offset—which means her survivor’s benefit is reduced to zero.