This week our focus returns to the FY25 State Budget, which is now before a House /Senate conference committee, as well as to new developments stemming from last week’s US Senate hearing on the Social Security WEP & GPO laws.
As you may know, our Association achieved significant success so far during the FY25 budget process. This began in January, when Governor Maura Healey proposed the creation of a Special Commission on the State and Teacher COLA within her budget proposal.
When the House unveiled its budget proposal in April, the COLA Commission was included within the outside sections of the document. The House took an additional step benefiting public retirees with the adoption of a floor amendment increasing the Basic Life Insurance Benefit for state retirees and active employees. Set in 1985 at $5,000 in 1985, the approved amendment would increase the benefit in two steps. First to $7,500 in FY25 and then increasing to $10,000 in FY26.
Again, to be clear, the Basic Life Insurance Benefit increase only applies to state retirees and active employees. Local retirees, including retired teachers, receive their life insurance benefits from the community from which they retired. Municipal governments have the ability to set local life insurance benefits at whatever level they choose, without the need for state approval. Our hope is that, similar to the increase in 1985, the approval of an improved Basic Life Insurance Benefit for State Retirees and Employees will serve as the catalyst for local action.
While the Senate chose not to take up either the COLA Commission or Basic Life Insurance within the budget approved in May, Senators proposed the creation of a Task Force on Post Retirement Public Sector Work. The Task Force proposal follows a report by the State Inspector General that alleges abuse and deficiencies under the current post retirement work law.
Like the COLA Commission, Mass Retirees would also hold a seat on the Task Force. A third Special Commission on Public Retiree Health Insurance, which was proposed by Governor Healey, remains before the House Committee on Municipal and Regional Governments.
Both versions of the FY25 State Budget are now before a House/Senate conference committee, which is comprised of three State Representatives and three State Senators: Representatives Aaron Michlewitz (Chair, House Ways and Means); Ann-Margaret Ferrante (Vice Chair, House Ways and Means), and Todd Smola (Ranking Republican, House Ways and Means); Senators Michael Rodrigues (Chair, Senate Ways and Means); Cindy Friedman (Vice Chair, Senate Ways and Mean); and Patrick O’Connor (Ranking Republican, Senate Ways and Means).
If history is a guide, conference committee deliberations will likely continue into early to mid-July, before a final compromise version of the budget is released, enacted by both branches and sent to the governor for approval. Once received, the governor has 10-days to approve, veto, or return budget items to the legislature for correction.
However, with formal legislative business ending on July 31, a very tight timeframe now exists.
Social Security WEP & GPO Update
At the federal level, last Friday’s US Senate field hearing in Columbus, Ohio on the Social Security Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) succeeded in drawing national attention to the issues. Chaired by US Senator Sherrod Brown (D-OH), the Subcommittee on Social Security called seven official witnesses to testify on the negative impact and unfairness of WEP/GPO on public retirees.
An official recording of the hearing has now been released and can be watched here.
The Senate has also called on retirees impacted by the WEP and/or the GPO to submit written testimony to the Finance Committee. The deadline to do so is one week from today, Friday, June 21, 2024. Scores of Mass Retirees members have already heeded this call and have submitted short personal statements on how the WEP/GPO laws have impacted them.
Instructions on submitting written testimony is as follows. Please note that the date of the Columbus Ohio hearing was June 7, 2024 and titled “Keeping the Promise of Social Security for Ohio’s First Responders and Public Servants”.
The following information is directly from the Senate Committee on Finance:
How do I submit a statement for the record?
Any individual or organization wanting to present their views for inclusion in the hearing record should submit in a Word document, a single-spaced statement, not exceeding 10 pages in length. No other file type will be accepted for inclusion. Title and date of the hearing, and the full name and address of the individual or organization must appear on the first page of the statement. Statements must be received no later than two weeks following the conclusion of the hearing.
Statements can be emailed to:
Statementsfortherecord@finance.senate.gov
Statements can be mailed (not faxed) to:
Senate Committee on Finance
Attn. Editorial and Document Section
Rm. SD-219
Dirksen Senate Office Bldg.
Washington, DC 20510-6200
Mass Retirees would like to note that testimony submitted anonymously and/or not adhering to the instructions above, will not be accepted.
Over the past week two additional US Senators (Ron Wyden (D-OR) and Mark Warner (D-VA) have signed on as cosponsors to S.597, which is Senator Brown’s proposal to fully repeal the WEP and GPO laws. This brings the official level of support in the US Senate to 59 Senators – an all-time high since the laws were created in 1983!
However in reading the official statement from Senator Wyden, who chairs the powerful Senate Finance Committee, he makes it clear that he does not support a full repeal of the laws that would lead to public retirees receiving larger Social Security benefits than what they actually paid for and earned. Wyden’s statement largely echoes those expressed by witnesses and Committee members during April’s WEP/GPO hearing before the House Subcommittee on Social Security.
Chairman Wyden stated: “As the Chairman and witnesses on the panels know, one of Social Security’s key pillars is its progressive formula: workers who worked predominantly in lower-paying jobs receive a higher replacement rate than those who worked in higher-paying jobs. However, when the Social Security Administration calculates Americans’ benefit amount, it does not include earnings from jobs not covered by Social Security. As a result, those workers currently receive a disproportionately larger Social Security benefit than what they would receive if they had worked in employment covered by Social Security.
“To address the inadvertent windfall, Congress enacted the WEP and GPO provisions in an effort to ensure fair treatment among workers who worked in covered and non-covered employment. However, rather than taking into account workers’ covered and non-covered earnings when calculating the Social Security benefit amount, the WEP and GPO are a “one-size-hits-all” reduction, slashing Social Security benefits by up to 60 percent. These Americans chose a life of service; we should not be unfairly penalizing them.
“I am proud to announce that I will be supporting Senator Brown’s legislation, the Social Security Fairness Act, and am committed to working with Senator Brown and colleagues to address this issue while protecting Social Security’s finances.”
Nearly coinciding with last week’s hearing, was an article contained within the Boston Globe regarding a public retiree from the Town of Falmouth, whose spousal Social Security benefit was all but eliminated when she retired from the school system. Members can read the full story here.
While much work remains to be done to bring relief from both the WEP and GPO laws, one important point is clear – these issues continuing to gain national attention. Pressure on Congress to act on WEP/GPO has never been higher, which is a direct result of the ongoing work of Mass Retirees and those organizations spread across the country fighting for fairness for public retirees.
A resolution to these two unfair laws is long overdue, but it is coming!
Next week we plan to provide a rundown of what’s inside the July Voice, which is on the way to your mailbox today.
Finally, Happy Father’s Day to my dad Hank and to all the dads amongst our ranks. I hope you enjoy the wonderful weekend ahead.
With great appreciation,
Shawn
Shawn Duhamel
Chief Executive Officer
Mass Retirees Association