Alaska Senate Joint Resolution 12 Urges the U.S. Congress to Eliminate Public Employee Disincentives in the Social Security Act
Security Fairness Act (SSFA) Re-introduced in Congress; Time to put an end to these shameful policies
By MARY KAUFFMAN
March 29, 2021
Both provisions affect the calculation of the Social Security benefits for individuals who also receive a state pension or one from a political subdivision. The Windfall Elimination Provision applies to direct public employees while the Government Pension Offset reduces benefits of spouses and survivors who are public employees – both of which cut benefits up to hundreds of dollars per month.
“The current plan is unfair to Alaska public employees. Alaskans who choose to enter public service should not be punished for that dedication when they choose to retire,” said Sen. Wielechowski. “Teachers, firefighters, public safety officers, and everyone who has signed up for public service in Alaska deserve the full benefits of retirement they have earned.”
The Government Pension Offset (GPO) affects the spousal benefits of people who work as federal, state, or local government employees—including educators, police officers, and firefighters—if the job is not covered by Social Security. GPO reduces by two-thirds the benefit received by surviving spouses who also collect a government pension. Nine out of 10 public employees affected by the GPO lose their entire spousal benefit, even though their spouse paid Social Security taxes for many years.
The Windfall Elimination Provision (WEP) reduces the earned Social Security benefits of an individual who also receives a public pension from a job not covered by Social Security. For example, educators who do not earn Social Security in the public schools but who work part-time or during the summer in jobs covered by Social Security have reduced benefits even though they pay into the system just like others. The WEP also affects people who move from a job in which they earn Social Security to a job, such as teaching, in which they do not.
The WEP substantially reduces benefits workers included and counted on when planning their retirement and it substantially penalizes lower paid public employees. These provisions also discourage qualified, talented individuals from entering into public service professions, hindering efforts to attract new math and science teachers from the private sector unwilling to sacrifice earned Social Security from prior careers. The WEP and GPO provisions do not eliminate a windfall for workers, they penalize public service employees by taking away benefits they earned throughout their careers.
For those who receive a government pension, their Social Security spousal or survivor benefits will be reduced by two-thirds of the amount of the qualifying pension under the Government Pension Offset. Congress created the GPO in 1977 to help ensure that spousal and widow(er) benefits of those with covered or non-covered lifetime earnings would be roughly equal. The offset originally was dollar-for-dollar for non-covered pensions, but Congress reduced it to two-thirds in 1983.
In 2006, the State of Alaska implemented a defined contribution plan for state employees entering the public workforce. The defined contribution plan is one of few public employee retirement plans in the nation that does not provide social security or a defined benefit to its public employees. For example, Alaskans who have become eligible for social security benefits when they retire decide to enter public service and build towards a defined contribution retirement plan. In that case, the Windfall Elimination Provision and/or Government Pension Offset reduces rightfully earned social security benefits.
In 2018, the Congressional Research Service indicated that nearly 13,000 Alaskans had reduced social security benefits due to these archaic provisions in the Social Security Act.
Senate Joint Resolution 12 is referred to the Senate State Affairs Committee and the Senate Finance Committee.
In May 2013, then U.S. Senator Mark Begich introduced the Social Security Fairness Act which amoung other things would remove penalties that are now placed on retirees who worked more than one job, paid into Social Security, but then retired under a different retirement system. Under current law, they are denied their Social Security benefits. Many government workers and some teachers in Alaska fall into this category. The act was re-introduced over the years and recently re-introduced again.
In January, U.S. Rep. Rodney Davis (R-Ill.) re-introduced H.R. 82, the bipartisan Social Security Fairness Act (SSFA), which eliminates the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), two titles of the Social Security Act that unfairly reduce or eliminate Social Security benefits for millions of Americans who have devoted much of their careers to public service. Co-leading the legislation with Rep. Davis is Rep. Abigail Spanberger (D-VA). The legislation currently has 21 bipartisan co-sponsors. In the last session of Congress, Davis organized a bipartisan group of 264 co-sponsors of the legislation.
“This bipartisan bill ensures that a teacher who spends his or her summers working a second job or a police officer who changes careers after years of service will not face a possible 40 percent reduction in their Social Security benefits,” said Davis.
Congress man Davis said, “By repealing these outdated provisions that unfairly penalize public servants in Illinois, we can provide some certainty to retirees while helping to recruit future teachers, firefighters, and police officers.”
Co-leading the legislation with Congessman Davis is Rep. Abigail Spanberger (D-VA). The legislation currently has 21 bipartisan co-sponsors. In the last session of Congress, Davis organized a bipartisan group of 264 co-sponsors of the legislation.
Rep. Spanberger said, “The Social Security Fairness Act makes sure educators, firefighters, and law enforcement professionals are able to enjoy the secure retirement they deserve. I’d like to thank Congressman Davis for his partnership on this bipartisan bill – and I urge my colleagues to recognize the need to provide financial certainty to public sector employees amid the COVID-19 crisis.”
National Education Association President Becky Pringle in a letter supported the re-introduction of the Social Security Fairness Act (SSFA) writing, “Educators who dedicate their lives to ensuring all students — no matter who they are, where they come from or where they live — should be able to retire with respect and dignity. The Social Security Fairness Act will ensure that educators and other public servants receive the benefits they have earned. For far too long, educators and other public servants have been wrongly penalized, and this legislation ensures that these noble public servants fully receive the benefits they are due. The National Education Association, which represents 3 million educators, healthcare workers and public employees, is pleased to support this important bipartisan legislation.”
The Fraternal Order of Police (FOP) National President Patrick Yoes FOP wrote a letter of support for the legislation. The Fraternal Order of Police represents 356,000 law enforcement officers and supports the passage of H.R. 82. Read the letter here (pdf).
The National Association of Police Organizations (NAPO), which represents 241,000 law enforcement officers across the country, also wrote a letter of support for H.R. 82. Read the NAPO letter (pdf).
National Active and Retired Federal Employees Association (NARFE) National President Ken Thomas said, “NARFE applauds Reps. Davis and Spanberger as they reach across the aisle, setting an example for their parties, in an effort to put an end to these shameful policies, which have harmed millions of hardworking and dedicated public servants for too many years.”
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