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The Voice of the Retired Public Employee
Continued From Page 1 ☞ timized by the WEP.
Working in tandem, House Ways and Means Chairman Kevin Brady (R-TX) and Ranking Member Richard Neal (D-MA) have agreed on a basic framework for a deal. The proposal was presented by Brady to Mass Retirees and the Retired Texas Teachers Association in mid-June, after which briefings were made to the AARP, the International Associ- ation of Fire Fighters (IAFF) and the leadership of each national public employee union.
As members know, Mass Retirees has joined with our Texas colleagues to help lead the national effort to reform both the WEP and Govern- ment Pension Offset (GPO) laws. At this time, Congressional activity focuses on the WEP. While reform of both laws is equally important, WEP reform enjoys greater support within Congress and is a more straightforward policy to reform. GPO reform will be taken up through a separate proposal at a later date.
Under the outline proposed by Brady and Neal, those retirees sub- jected to the WEP and eligible for Social Security prior to January 1, 2025 will receive a monthly rebate as part of their Social Security benefit. The rebate will be a uniform dollar amount for all retirees, which will grow with inflation. The initial amount of the rebate remains under negotiation.
For those who first become eligi- ble for Social Security on or after January 1, 2025 a brand new Social Security formula will exist for all public and private sector retirees. This new formula will accurately and fairly determine Social Security benefits based on the actual quarters paid into Social Security versus another retirement system not covered by Social Security.
Eligibility for Social Security is determined by age and quarters. In
order to qualify for Social Security, one must be 62 years of age or older AND have at least 40 quarters.
It is important to note that for the purpose of this reform proposal, whether or not someone chooses to enroll in Social Security has no impact on whether their benefit falls under the WEP/rebate scenario or would be subject to the new formula in 2025. The determining factor is simply your date of eligibility. If you are eligible before 1/1/2025 then you fall under the WEP/rebate sce- nario.
The original purpose of the WEP law was to correct a calculation flaw in the standard Social Security formula, whereby public retirees from states outside of the Social Security system received a Social
Security benefit that was higher than what they had actually earned. Due to a lack of accurate data and tech- nology in 1983, the WEP law went too far and took too much money away from public retirees.
“Undoubtedly, members are going to ask why current retirees are going to receive a rebate and future retirees a new calculation. The simple answer is that it is too expen- sive and complicated to recalculate the Social Security benefits of 2 million people. We do not have the support in Congress to incur that type of cost, which would easily run into the billions,” explains Legisla- tive Director Shawn Duhamel.
If the compromise proposal were passed into law this year, the monthly rebate would begin in January 2020.
Avoiding Pitfalls of 2018
Members may recall the great dis- appointment in July 2016, when a
similar proposal was set to advance in the House of Representatives – only to be defeated at the 11th hour.
To this day, what makes that defeat so hard to accept is that it was at the hand of supposed allies – the National Educators Association (NEA) and the IAFF.
In the case of the IAFF, firefighters raised legitimate concerns in 2016 that the proposal, as it was then drafted, would have unfairly harmed public employees who also have substantial work under Social Secu- rity. This concern is relative to the 30-year rule, whereby those public employees with 30 or more years of substantial earnings under Social Security are exempt from the WEP.
Mass Retirees and the Texas Teachers have joined with the IAFF in calling for a transition period so that the rules are not abruptly changed for those nearing retire- ment age. Brady and Neal have lis- tened to these concerns, from which the 1/1/2025 transition date has resulted.
Back in 2016, the NEA remained insistent on a full repeal of the WEP and GPO, despite having little Con- gressional support and no viable path forward.
Others raised concern that the new Social Security formula would, in some cases, slightly lower the future Social Security benefits of private sector workers who have worked in non-Social Security employment but are not currently subject to the WEP. Official estimates place the average reduction at less than $10 per month, but the amount will vary depending on individual employ- ment history.
Today, early indications are that the AARP has fully endorsed the framework of the new proposal. Mass Retirees and the Texas Retired Teachers Association have also agreed to support the plan.
Congressional leaders are now awaiting word from key union offi- cials, namely the IAFF, NEA, AFT (American Federation of Teachers)

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