Massachusetts Retirees Not Alone

JULY 2013 VOICE: At times, Association members, affected by the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO), may feel that they are alone in the fight to repeal both dreaded laws.

Massachusetts Retirees Not Alone

JULY 2013 VOICE: At times, Association members, affected by the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO), may feel that they are alone in the fight to repeal both dreaded laws.

But as two recent studies by the Congressional Research Service demonstrate, over a million retirees and 6.1 million active employees are impacted by the two laws. With federal employees now participating in Social Security, the majority of impacted active employees are from one of the seven non-Social Security states.

The provisions of the WEP/GPO laws are applied based on whether or not a retiree paid into Social Security as a public employee, not where they reside after retirement.

While there are pockets of public employees in all fifty states that do not participate in Social Security at all, few, if any, public employees in these seven states contribute to Social Security as a government worker. In addition to Massachusetts, these key states are CA, CO, IL, LA, OH and TX. See highlights in chart, pg 4.

Newer retirees often question why Massachusetts and these other states are not part of the Social Security system to begin with and why they simply cannot join today?

The Massachusetts public pension system, along with others such as Illinois and Louisiana, pre-date the founding of Social Security. When the Social Security system was created in 1935, federal law directly banned public employees who were enrolled in public pension plans from participation. Years later this prohibition was dropped, but by then those original state plans were well-established pension funds and moving into Social Security would have proven financially harmful.

It should also be noted that in 1938, President Roosevelt successfully expanded Social Security to provide for a spousal benefit for work-at-home women. Back then, many women did not work outside of the home long enough to earn their forty quarters in order to qualify for a Social Security benefit of their own. So the spousal benefit was originally created to provide retirement income for those who otherwise would have none.

Forty years later, in the late-1970s and early ‘80s, Congress and the White House began looking at ways to reform Social Security and bolster its finances. They found a source of revenue with public employees and, while stopping short of mandated enrollment in Social Security, created the two offset laws to be applied to retirees from non-participating public entities.
Repeal Bill: H.R. 1795

Congressmen, from different states and political parties, have joined together to hopefully correct a longstanding problem that they share in common – and with us here – namely, Social Security’s oppressive WEP/GPO.

US Representatives Rodney Davis, an Illinois Republican, and Adam Schiff, a California Democrat, have introduced H.R.1795 that will repeal both the WEP and GPO. Like Massachusetts, both California and Illinois are among the states whose public retirees are most heavily hurt by the WEP and GPO.

“Thirty years ago, we first predicted that down the road, the Windfall and Offset laws would be severely damaging to members, and regrettably our premonitions have proven to be more and more accurate,” observes Association President Ralph White. “Since then we’ve pushed to repeal them.
“Our Association hasn’t given up, nor have others. And, H.R.1795 is the latest example of the perseverance and bipartisanship needed, if we are ever to achieve any relief from the Windfall and Offset laws.

“We expect that the entire Mass. congressional delegation will be signing onto this bill.  With all the debate now in Washington over entitlement reform, this issue must be factored into the discussions and H.R.1795 will help to do that.”
One question, frequently asked by members, is whether WEP/GPO repeal would help them even if they began receiving benefits before a repeal was enacted. Based upon our reading of the bill as introduced, H.R.1795 would also help those, whose Social Security benefits are being reduced by the WEP and/or GPO before a repeal took effect. Their Social Security benefits would be increased going forward from the date that the repeal took effect.

“It is very encouraging to see the repeal bill filed and renewed attention being brought to these issues,” said Association Legislative Liaison Shawn Duhamel. “All indications remain that the best chance of WEP/GPO being addressed rests with the larger issue of Social Security reform. Right now our job is to keep this issue alive and on the minds of our federal officials.”

Please remember that H.R.1795 is not a law at this time, but is pending action in the House Ways and Means Committee.

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