From Federal News Network:
Congress — at least the House side of it — is closer than ever to giving the green light to repeal or reform WEP [Windfall Elimination Provision] and GPO [Government Pension Offset], the so-called “Evil Twins” that eat into, or eliminate, the Social Security benefits of hundreds of thousands of former government employees or their widows. ...
For decades, many whose Social Security benefits have been reduced by WEP or Offset have been pushing Congress to fix them. Backers of WEP and Offset say they prevent former feds under the CSRS retirement plan, and state and local government employees whose jobs were not covered by Social Security for most or all of their careers, from collecting higher benefits based on relatively short employment in a Social Security job. Backers of the laws say they prevent people from using what they call a “welfare tilt” in Social Security toward people with lower lifetime earnings, protecting the program from being ripped off by preventing “excessive” payments to government retirees/survivors who spent the minimal time paying into Social Security. Opponents say it was a cruel way to save money by denying some or all benefits to people who need it most, and that the former government people are the ones being ripped off when their benefits are reduced or simply wiped out. ...
John Hatton, staff vice president for policy and programs at NARFE [National Active and Retired Federal Employees association] said “While NARFE and organizations representing state and local retirees have built significant support for repeal of WEP and GPO over the years, securing floor voters in either chamber of Congress has remained out of reach, perhaps due to the likely costs of the repeal bills and projected solvency challenges for Social Security. But a recent rule change in the House of Representatives allows bills to bypass committee consideration if they receive 290 cosponsors. H.R. 82, the Social Security Fairness Act, which would repeal both WEP and GPO is up to 276 cosponsors, just 14 short of that mark. So we continue to push representatives to cosponsor the bill, and hope for some long-awaited progress on these issues.” …
In other words, it's extremely unlikely to happen in the House of Representatives. Also, although this article doesn't say so, it's out of the question in the current Senate.
Both GPO and WEP make sense. Spouses and widows would not be eligible for monthly benefits on a deceased person's record if their own social security is too high. In the case of GPO, the only reason they would be eligible for benefits is because they worked for a governmental agency that didn't pay into social security. Had they paid into social security their social security would have been too high to receive those benefits. It's double dipping extraordinaire.
ReplyDeleteI will say it... this is nothing but a WEP dream.
ReplyDelete12:32 I worked under FICA before getting a gov job. If you look at my SEQY printout, you'd think I shouldn't get a full calculation, my earnings were so low.
ReplyDeleteBut I actually worked long hours at low pay for those piddly earnings. I was a waitress before minimum wage laws applied to tipped hotel and restaurant employees. Yes, I am that old. So I do not agree that it makes sense in my case. I was not working part time with the intention of double dipping.
@915 Would you trade your govt pension for the amount you would have received if all your earnings had been covered by SSA? I've yet to meet anyone who would as govt pensions generally pay better than SSA benefits. There's very few SSA claimants that receive close to what they made working while some state govt employees make 90% or more of their salary.
DeleteWEP and GPO were clearly needed and entirely proper to correct for the welfare tilt as per the article. But, that doesn't mean people will like it.
ReplyDeleteAs was reportedly said by Upton Sinclair “It is difficult to get a man to understand something, when his salary depends on his not understanding it.”
Yes, the implementation may be clunky and not always completely rationale or in balance but the basic idea is sound.
Just like the old fight over the "notch" people just don't want to believe no matter the evidence.
9:15, no way is my pension 90% of my salary, not even close. What planet are you on?
ReplyDeleteMine isn't either but some people, mostly in blue states, get very high pensions.
DeleteStill, would you trade your pension for what you'd get if you only paid into SSA?
If you work and retire making $100K, you could expect your PIA to be about $3000. If you worked 35 years under CSRS, the old federal retirement that doesn't pay into SSA, you'd get about $5333 and could have gotten that as early as age 55.
I know teachers from New York who make more now with the NYS pension and Social Security than they did when they worked.
Delete5:57 I don't know where you get your numbers from. CSRS doesn't pay according to red or blue states. I don't really know what I'd get if I hadn't been under CSRS, but I do know my CSRS contribution was higher than FICA. I didn't make $100K when I retired. You could have figured that out since I said I was a waitress, a woman who worked and earned my 40 quarters before getting my gov job. Pretty hard to do that and rise to the level of $100K. Because I didn't start my gov job at age 20, (remember I earned 40 quarters before my gov job) I couldn't retire at 55.
ReplyDeleteNice of you to gloss over all the details and dismiss me.
The bottom line is that your government pension should be significantly higher than your SSA benefit. So the question is, would you trade your pension for your SSA benefits?
ReplyDeleteSSA’s calculation gives low wage earners a higher return on what they paid in to the system. When you work 10 years under FICA and then 25-30 under a NON- FICA system, you get the benefit of that higher return even though you may have had significant earnings.
WEP and GPO account for this lack of FICA earnings. I don’t see what the problem is when it’s clearly explained.
Oh, I see now. Since you explained it so clearly.
ReplyDeleteWEP was designed to stop gov workers from double dipping. I covered that previously. Apparently you missed that. Working full time at low wages under FICA is not double dipping. But you go on your merry way.
Without WEP, you would be receiving back 90% of your FICA taxable wages in the form of a Social Security check because of the agency's progressive payout format (look up "bend points"), because based on only your FICA taxable incom you are would be deemed a low earner. In reality, it your government wages were FICA taxable you would only receive about 40% of your wages back because of the aforementioned benefit formula containing bend points.
DeleteIt is unfair for non-covered pensioners (such as those in the CSRS scheme) to receive a significant government pension plus a Social Security benefit equivalent to 90% of their average annual FICA taxable wages when the rest of th public, who have the same career earnings but pay FICA on every dollar they earn, on average receive a Social Security benefit that typically replaces a mere 30-40% of their annual FICA taxable wages. The WEP simply pulls your benefit into this same 30-40% range.
The "double dip" is getting a Social Security benefit rate that is only meant for low earners.
This same logic applies to the GPO.
I didn’t say it wa a double dipping. I explained why WEP applies.
ReplyDeleteIt’s an adjustment to the formula used to calculate your benefits. You have to stope being so clouded by your bias and actually read.
We are adjusting your calculation down to show the system you were not I fact a low wage earner under WEP. No one accused you of double dipping. As a matter of fact, if you have 20 years under FICA, WEP is not as severe and if you have 30 years under FICA you get both at full tilt.
I get it you don’t like the rules and I may agree with you that it’s unfortunate. However, just because you don’t like something or don’t agree with how it affects you doesn’t make it wrong or unjust.
Just keep pushing it off those boomers that are effected by it will be getting older and die and the problem will be self cleaning. Like Notch Babies.
ReplyDeleteNo one is pushing anything on anyone. Last time I checked, you and everyone else is free to choose where they work.
ReplyDeleteAnother solution would be to eliminate all exceptions to paying FICA taxes, even if the government pension provides a better retirement. Then there would be no need for WEP or GPO. Every employee has to pay FICA even if they are also paying into a more generous program. Makes us all the same.
ReplyDelete