The Social Security Protection Act of 2004 (P.L. 108-203) amended the Government Pension Offset (GPO) provisions to require that State and local government employees be covered by Social Security throughout their last 60 months of employment to be exempt from GPO. Prior to July 1, 2004, GPO did not apply if an individual’s last day of employment was in a position that was covered by both Social Security (under a Section 218 agreement) and a State or local government pension system.
The Educational Resource Center, Inc. (also known as John Wood Charter School or JWCS), located in San Antonio TX, hired 633 individuals to work for one day in order to meet the “last day” GPO exemption. SSA determined that work at JWCS did not qualify for Social Security coverage because JWCS had not entered into an approved 218 agreement between the State of Texas and SSA. Therefore, individuals who applied for their spouse’s or widow’s benefit after completing their “last day” at JWCS had GPO applied to their records.
The Attorney General of Texas was consulted and determined that an open-enrollment charter school, such as JWCS, is a governmental entity under Texas law. Since the Attorney General of Texas has rendered this decision, the State of Texas has taken the necessary steps to include JWCS in a Section 218 agreement that allows the entity to be covered by Social Security.
As an attorney, I have some appreciation for loopholes, but the involvement of the state of Texas in creating this loophole seems questionable to me.