Senate Bill S206 (GPO/WEP repeal)...whom should we thank for sponsoring and cosponsoring? One of our two Ohio U.S. Senators is on our side!

From John Curry, August 24, 2008

Yes, this bill is still gathering dust bunnies "on the shelf" in the U.S. Senate....it was referred to a Senate Committee on Finance back on Jan. 9, 2007 and is still sitting there gathering dust bunnies. A copy of this email should be forwarded to every public servant (who retires under a state-sponsored retirement system) that you know so that they can see how they have been forgotten and short-changed - not just public school educators but....police officers, firemen, municipal workers, county employees, non-certified school employees, and others too numerous to mention. I'll bet the majority of them aren't even aware of how their Social Security benefits will be reduced because they will be retiring or have retired with a public pension program! If they all started writing their U.S. Senator concerning this bill maybe we could have some movement on this issue. A list of the 37 U.S. Senate sponsors and co-sponsors of this bill follows the bill's general overview....you might want to view this list [click here to view list] just to see who stood up for public employees....you might just be surprised! If your Senator is not on this list you might want to ask them why they aren't!

John

On the day this bill was introduced to our U.S. Senate, the two senators below spoke to the Senate and here is what they had to say:

Sen. Dianne Feinstein [D-CA]: [Introducing S. 206] Mr. President, I rise today with my colleague, Senator COLLINS, to introduce legislation that protects the retirement benefits earned by public employees and eliminates barriers which discourage many Americans from pursuing careers in public service. This bill will repeal two provisions of the Social Security Act--the Government Pension Offset and Windfall Elimination Provision--which unfairly reduce the retirement benefits earned by public employees such as teachers, police officers, and firefighters.

The Government Pension Offset reduces a public employee's Social Security spousal or survivor benefits by an amount equal to two-thirds of his or her public pension.

Take the case of a widowed, retired police officer who receives a public pension of $600 per month. His job in the local police department was not covered by Social Security, yet his wife's private-sector employment was. An amount equal to two-thirds of his public pension, or $400 each month, would be cut from his Social Security survivor benefits. If this individual is eligible for $500 in survivor benefits, the Government Pension Offset provision would reduce his monthly benefits to $100.

In most cases, the Government Pension Offset eliminates the spousal benefit for which an individual qualifies. In fact, 9 out of 10 public employees affected by the Government Pension Offset lose their entire spousal benefit, even though their spouse paid Social Security taxes for many years.

The Windfall Elimination Provision reduces Social Security benefits by up to 50 percent for retirees who have paid into Social Security and also receive a public pension, such as from a teacher retirement fund.

While the reforms that led to the creation of the Government Pension Offset and Windfall Elimination Provision were meant to prevent public employees from being unduly enriched, the practical effect is that those providing critical public services are unjustly penalized.

According to the Congressional Budget Office, the Government Pension Offset provision alone reduces earned benefits for more than 300,000 Americans each year, by upwards of $3,600. In some cases, for those living on fixed incomes, this represents the difference between a comfortable retirement and poverty.

Nearly one million Federal, State, and municipal workers, as well as teachers and other school district employees, are unfairly held to a different standard when it comes to retirement benefits.

Private-sector retirees receive monthly Social Security checks equal to 90 percent of their first $656 in average monthly career earnings. However, under the Windfall Elimination Provision, retired public employees are only allowed to receive 40 percent of the first $656 in career monthly earnings, a penalty of over $300 per month.

This unfair reduction in retirement benefits is inequitable. The Social Security Fairness Act will allow government pensioners the chance to receive the same 90 percent of their benefits to which nongovernment pension recipients are entitled.

We must do more to encourage people to pursue careers in public service. Unfortunately, the Government Pension Offset and Windfall Elimination Provision make it more difficult to recruit teachers, police officers, and fire fighters; and, it does so at a time when we should be doing everything we can to recruit the best and brightest to these careers.

California's police force needs to add more than 10,000 new officers by 2014--a growth of nearly 15 percent--while hiring more than 15,000 additional officers to replace those who leave the force.

It is estimated that public schools will need to hire between 2.2 million and 2.7 million new teachers nationwide by 2009 because of record enrollments. The projected retirements of thousands of veteran teachers and critical efforts to reduce class sizes also necessitate hiring additional teachers.

California currently has more than 300,000 teachers but will need to double this number by 2010, to 600,000 teachers, in order to keep up with student enrollment levels.

Most importantly, the Government Pension Offset and Windfall Elimination Provision hinder efforts to recruit new math and science teachers from the private sector. As our world becomes increasingly interconnected, it is imperative that our school children receive the finest math and science education to ensure our Nation's future competitiveness in the global economy.

It is counterintuitive that on the one-hand, policymakers seek to encourage people to change careers and enter the teaching profession, while on the other hand, those wishing to do so are discouraged because they are clearly told that their Social Security retirement benefits will be significantly reduced.

Now that we are witnessing the practical effects of these 20 year old provisions, I hope that Congress will pass legislation to address the unfair reduction of benefits that essentially sends the message that if you do enter public service, your family will suffer and will be unable to receive the full retirement benefits to which they would otherwise be entitled.

I understand that we are facing deficits and repealing the Government Pension Offset and Windfall Elimination Provision will be costly.

I am open to considering all options that move us toward our goal of removing this inequity by allowing individuals to keep the Social Security benefits to which they are entitled while promoting public sector employment.

We should respect, not penalize, our public service employees. I hope that my colleagues will join me in sending this long overdue message to our Nation's public servants, that we value their contributions and support giving all Americans the retirement benefits they have earned and deserve.

I ask unanimous consent that the text of the bill be printed in the RECORD.

There being no objection, the text of the bill was ordered to be printed in the RECORD, as follows:

Sen. Susan Collins [R-ME]: Mr. President, I am pleased to join with my colleague from California, Senator FEINSTEIN, in introducing the Social Security Fairness Act. This bill repeals two provisions of current law--the windfall elimination provision (WEP) and the government pension offset (GPO) that unfairly reduce earned Social Security benefits for many public employees when they retire.

Individuals affected by both the GPO and the WEP are those who are eligible for Federal, State or local pensions from work that was not covered by Social Security, but who also qualify for Social Security benefits based on their own work in covered employment or that of their spouses. While the two provisions were intended to equalize Social Security's treatment of workers, we are concerned that they unfairly penalize individuals for holding jobs in public service when the time comes for them to retire.

These two provisions have enormous financial implications not just for Federal employees, but for our teachers, police officers, firefighters and other public employees as well. Given their important responsibilities, it is unfair to penalize them when it comes to their Social Security benefits. These public servants--or their spouses--have all paid taxes into the Social Security system. So have their employers. Yet, because of these two provisions, they are unable to collect all of the Social Security benefits to which they otherwise would be entitled.

While the GPO and WEP affect public employees and retirees in virtually every State, their impact is most acute in 15 States, including Maine. Nationwide, more than one-third of teachers and education employees, and more than one-fifth of other public employees, are affected by the GPO and/or the WEP.

Almost one million retired government workers across the country have already been adversely affected by these provisions. Many more stand to be affected by them in the future. Moreover, at a time when we should be doing all that we can to attract qualified people to public service, this reduction in Social Security benefits makes it even more difficult for our Federal, State and local governments to recruit and retain the teachers, police officers, firefighters and other public servants who are so critical to the safety and well-being of our families.

The Social Security windfall elimination provision reduces Social Security benefits for retirees who paid into Social Security and who receive a government pension from work not covered under Social Security, such as pensions from the Maine State Retirement Fund. While private sector retirees receive Social Security checks based on 90 percent of their first $656 average monthly career earnings, government pensioners checks are based on 40 percent--a harsh penalty of more than $300 per month.

The government pension offset reduces an individual's survivor benefit under Social Security by two-thirds of the amount of his or her public pension. It is estimated that 9 out of 10 public employees affected by the GPO lose their entire spousal benefit, even though their deceased spouses paid Social Security taxes for many years.

What is most troubling is that this offset is most harsh for those who can least afford the loss--lower-income women. In fact, of those affected by the GPO, 73 percent are women. According to the Congressional Budget Office, the GPO reduces benefits for more than 200,000 of these individuals by more than $3,600 a year--an amount that can make the difference between a comfortable retirement and poverty.

Our teachers and other public employees face difficult enough challenges in their day-to-day work. Individuals who have devoted their lives to public service should not have the added burden of worrying about their retirement. Many Maine teachers, in particular, have talked with me about this issue. They love their jobs and the children they teach, but they worry about the future and about their financial security in retirement.

I hear a lot about this issue in my constituent mail, as well. Patricia Dupont, for example, of Orland, ME, wrote that, because she taught for 15 years under Social Security in New Hampshire, she is living on a retirement income of less than $13,000 after 45 years in education. Since she also lost survivors' benefits from her husband's Social Security, she calculates that a repeal of the WEP and the GPO would double her current retirement income.

These provisions also penalize private sector employees who leave their jobs to become public school teachers. Ruth Wilson, a teacher from Otisfield, ME, wrote:

"I entered the teaching profession two years ago, partly in response to the nationwide pleas for educators. As the current pool of educators near retirement in the next few years, our schools face a crisis. Low wages and long hard hours are not great selling points to young students when selecting a career.

I love teaching and only regretted my decision when I found out about the penalties I will unfairly suffer. In my former life as a well-paid systems manager at State Street Bank in Boston, I contributed the maximum to Social Security each year. When I decided to become an educator, I figured that because of my many years of maximum Social Security contributions, I would still have a livable retirement `wage.' I was unaware that I would be penalized as an educator in your State."

In September of 2003, I chaired a Governmental Affairs Committee hearing to examine the effect that the GPO and the WEP have had on public employees and retirees. We heard compelling testimony from Julia Worcester of Columbia, ME--who was then 73. Mrs. Worcester told the Committee about her work in both Social Security-covered employment and as a Maine teacher, and about the effect that the GPO and WEP have had on her income in retirement. Mrs. Worcester worked for more than 20 years as a waitress and in factory jobs before deciding, at the age of 49, to go back to school to pursue her life-long dream of becoming a teacher. She began teaching at the age of 52 and taught full-time for 15 years before retiring at the age of 68. Since she was only in the Maine State Retirement System for 15 years, Mrs. Worcester does not receive a full State

After a lifetime of hard work, Mrs. Worcester, is still substitute teaching just to make ends meet. This simply is not fair. I am therefore pleased to join Senator FEINSTEIN in introducing this legislation to repeal these two unfair provisions, and I urge my colleagues to join us as cosponsors.

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Quick Info: S. 206: Social Security Fairness Act of 2007 Last Action: Read twice and referred to the Committee on Finance. Status: Introduced