(UPDATED) Leaders of the Connecticut Education Association (CEA) joined union leaders from around the country in Washington on Wednesday morning to demand that the Senate take action on legislation to prevent public sector employees from losing thousands of dollars in pension benefits.
In November, the House of Representatives passed the Social Security Fairness Act. The legislation eliminates the windfall elimination provision (WEP) and the government pension offset (GPO), both of which can limit the amount of money that retirees – who also have a non-covered pension – receive from Social Security. Many public sector employees, including teachers, firefighters, and police, are subject to WEP/GPO restrictions.
Kate Dias, president of the Connecticut Education Association, said in a phone interview from Washington that the provisions are penalties that were levied against public servants in the late 1970s early 1980s as a way to recoup money and preserve the Social Security fund. She said that past lawmakers specifically targeted municipal public servants, as WEP/GPO restrictions do not apply to federal or state workers.
“One of the things that I don’t think they forecast when they thought this through was how many people would be paying into not just a pension, but into Social Security by way of second jobs and second careers,” Dias said. “And so here we are 40 years later saying ‘Hey, you targeted public servants and created an inequity in the financial capacity of our retirees, and you need to right this wrong because we have people who are in private service and receive both their pension and Social Security benefits. They don’t have any of these penalties.’”
According to data from the Congressional Research Office, more than 22,500 people in the state of Connecticut are affected by the WEP, with the overwhelming majority of those being retired workers.
The windfall elimination provision potentially affects the most public sector employees. Passed in 1983, the WEP impacts Social Security benefits by adjusting the formula the federal government uses to calculate how much money an individual will receive. When calculating benefits, an individual’s earnings total in the first bracket of the formula is multiplied by 90%. Under the WEP, the 90% factor in the first bracket of the formula is reduced to as low as 40%. The effect is to lower the proportion of earnings in the first bracket that are converted to benefits. That first bracket is then added to two other brackets to calculate benefits.
The government pension offset is more straightforward in its calculations. If an individual receives a pension or disability from a federal, state, or local government which they didn’t pay Social Security taxes on, then their Social Security benefits can be reduced by two thirds of the pension amount. For example, if an individual receives a monthly civil service pension of $3,000, two-thirds of that, or $2,000, must be deducted from their Social Security benefits. If 2/3 is larger than the benefit, then the individual will receive nothing.
Dias rejects the claim from some that the provisions prevent public employees from “double dipping,” or receiving both Social Security benefits and a pension.
“Nobody’s asking to obtain a benefit that they haven’t paid into,” Dias said. “The point is that these are all benefits that we’ve paid for. We’re just being told you can’t access them, and I would I would think that the idea that I’m double dipping by getting a survivor benefit that every other employed individual has access to is really quite a limited mindset, and that people really need to think that all the way through. [These restrictions were] created as a way to try and balance the books on the backs of these individuals because they could.”
Still, Dias is hopeful that the Social Security Fairness Act will pass Congress in the current session. At a news conference that Dias attended, Senate Majority Leader Chuck Schumer, D-NY, pledged to bring the bill to the floor in the Senate for a vote, and said that it would be a standalone bill to put each senator on the record.
“This has been a priority for the National Education Association for 40 years, and it’s also been a priority for our affiliates, including presidents from Connecticut, Kentucky, Louisiana, and Massachusetts who are here today,” Princess Moss, Vice President of the National Education Association, of which the CEA is a state affiliate, said at the press conference.
“These unjust penalties hurt individuals affected and their families, but I need you to understand the damage that they do to the education profession. It makes it hard to attract and keep talented educators and that hurts our students too. These unjust penalties, especially the GPO, disproportionately impact women, many of whom face poverty and retirement as a result. This is not just an issue of fairness, justice, and respect. This is about the future of the public education profession,” Moss said.
The American Federation of Teachers was also represented Wednesday. AFT President Randi Weingarten spoke to the gathering in the rain, saying that they would make sure every senator and representative would be asked to fight for fairness in retirement for workers who have played by the rules: