From a press release issued Friday:
Today, Ways and Means Committee Chairman Richard E. Neal introduced the Public Servants Protection and Fairness Act, H.R. 4540, legislation to fix the Windfall Elimination Provision (WEP) for future retirees and provide meaningful relief to current WEP retirees. The bill ensures that public servants across the nation can retire with the security and dignity they deserve.
The legislation establishes a new, fairer formula that will pay Social Security benefits in proportion to the share of a worker’s earnings that were covered for Social Security purposes. This provision is coupled with a benefit guarantee ensuring no benefit cuts relative to current law for all current and future retirees. Current WEP retirees will receive $150 a month in relief payments. ...
“The WEP negatively affects nearly 2 million retired public servants across the country, including about 73,000 in Massachusetts,” said Chairman Neal. “Public employees like firefighters, teachers, and police officers should not miss out on the Social Security benefits they earned over decades of hard work. With this legislation, these valued members of our communities will have greater retirement security and peace of mind.”
Originally, the WEP was intended to equalize the Social Security benefit formula for workers with similar earnings histories, both inside and outside of the Social Security system. However, in practice, it unfairly penalizes many public employees. ...
If WEP unfairly penalizes government employees (and I am subject to WEP), then the current PIA formula unfairly rewards lifetime low income workers.
ReplyDeleteWill this turn on a partisan basis? Because if approved (and I would get an extra $150 a month) it will hasten the eventual failure of the Social Security system.
I wouldn't worry too much about it - this has exactly zero chance of making it past the Republican majority Senate.
ReplyDeleteJust like all the WEP bills introduced in the past....
I am not sure how WEP is currently calculated, but the new method in the bill seems a reasonable way to calculate benefits. It does so by calculating what the PIA would be if all income were included, and then multiplying that by the fraction of average income that was earned under Social Security. The avoids the windfall that WEP is designed to prevent, since PIA is calculated on total income. So I assume the current WEP gives lower benefits than this. The new formula is not to just ignore the "windfall," but to eliminate it in a different way.
ReplyDeleteThe bill states that money would be transferred to the trust fund to make up for the extra cost, so the bill will not hasten the "failure" of the Social Security system (I don't think the trust fund will be exhausted, and even if it is, the system will still go on, so I wouldn't use "failure").
@9:14 Yes, I missed that sentence about money getting transferred to the trust funds. Money from where? What budget item would be reduced to cover this? Maybe new money from some new source...
ReplyDelete