News about the Government Pension Offset & the Windfall Elimination Provision The GPO and the WEP affect persons who have worked for government agencies which did not pay FICA taxes for them during their employment. Currently, about 1.5 million retirees are affected by the WEP and more than one half million are affected by the GPO. Teachers in 15 states (1/3 of NEA members), state, city and special district employees in 26 states, federal employees in every state, and foreign immigrants with a home-country pension are affected. Penalizing these retirees only saves Social Security less than 2% of its yearly expenditures. For many years there have been bills to repeal these unfair penalties in Congress, but despite the number of co-signers on the bills, they have never been moved out of committee. Diane Feinstein has introduced many of these bills; however, during the last session she declined to do so, and she told us clearly that repeal isn’t working and asked us for other suggestions. In this new Congressional session we already have two choices: 1. Another total repeal bill (GPO and WEP) has been introduced in the House—HR 973—by Rep. Rodney Davis (R-IL) and Adam Schiff (D-CA). A full-repeal bill will be coming in the Senate soon, also. These bills are backed by NEA. The NEA position is that there must be full repeal of both offsets, however, they commend incremental efforts to make progress in this direction. 2. Congressman Kevin Brady (R-TX) has introduced a PARTIAL repeal bill for the WEP only, H.R. 711, which is unique in that the offset reductions are fully paid for by the reforms incorporated in the legislation. The Social Security actuary has calculated that the new formula, to become effective on January 1, 2017, provides enough revenue to reduce the impact of the offset for new retirees by 50%. In addition, enhanced enforcement of the current law, possible because SSA will have 30 years of income history at the end of 2016 (due to Medicare contribution data), will fund a reduced offset for current retirees of approximately 30%. Since the sponsors are committed to a revenue neutral bill, the amount of the adjustments is being driven by available funding. Since Brady and his co-sponsor Richard Neal (D-MA) are senior members of the House Ways & Means Committee, there is hope this bill may move out of committee. Persons affected seem to be split on this new bill, HR 711: Those against it are saying: The WEP is wrong, and we should not be subject to it at all. Partial repeal is not enough. Repeal should be part of a larger re-design of the Social Security system. Those supporting the bill say: After 30 years no repeal bills have ever passed. This “revenue neutral” bill has a chance of getting through Congress. It is based on the retiree’s whole life earnings and was designed to approximate the kind of SS retiree benefits that people with whole career SS earnings would get and is, therefore, a more “fair” offset than the current WEP formula. Another concern here in California is that a 2011 CalSTRS survey of their active membership showed that more than one half of respondents did not know if the WEP or the GPO would affect them. In addition, our experience is that it is doubtful that they are aware of how large an impact the offsets will have on their retirement. Current full-career teachers will get nothing from a spouse’s survivor benefit—often a loss of $2,000 a month or more because of the GPO. For teachers who come to the profession late, after staying at home with children, working part time, or being a dependent spouse, the GPO can eliminate all spousal benefits they have earned, as much as $1,000 or more each month. The WEP costs retirees $400 a month or more. The Committee for Social Security Fairness is fighting for repeal—join us at ssfairness.com for monthly actions and information and/or like our Facebook page for daily updates: Social Security Fairness – Repeal the GPO/WEP. Email us at email@example.com.
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