Social Security & Education

Introduction

The Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP) directly affect one third of all American educators, effectively cutting them off from earned benefits through Social Security. This measure was passed on misinformation in order to address budgetary issues, but has directly impacted the most vulnerable of the possible population. Teachers and other public servants are losing their hard-earned benefits that they have been paying into all their lives, and so efforts are being made to repeal these clauses. 

Government Pension Offset (GPO) & Windfall Elimination Provision (WEP)

The National Education Association (NEA) is continually at work to hold the government accountable even as they assist the governments’ organizing power to proactively aid the education sector. However, the bipartisan Social Security Fairness Act of 2015 (H.R. 973/S.1651) would repeal the Government Pension Offset (GPO), which reduces public employees’ Social Security spousal or survivor benefits by two-thirds of their public pension, and the Windfall Elimination Provision (WEP), which reduces the earned Social Security benefits of an individual who also receives a public pension from a job not covered by Social Security. GPO and WEP are unfair—they deprive educators and other public employees of Social Security benefits they have earned. (NEA)

(Figure omitted for preview. Available via download).

Those who advocate against the GPO and WEP emphasize that the measures are based on faulty assumptions. In this case, “The offsets were based on a decision to treat pensions from certain public positions as if they were the same as Social Security benefits, despite the fact that these ‘non-covered’ state and local positions have nothing to do with Social Security” (Social Security Fairness). These assumptions are based on two errors:

• Error One: These public agency pensions were earned separately and differently from Social Security, yet they are used to reduce the amount of Social Security benefits that a worker receives during retirement. When participation is required by both Social Security and also State and local pensions, the public pension is earned and collected separately. Therefore, it should have no effect on Social Security benefits earned elsewhere. 

• Error Two: The GPO/WEP formulas are arbitrary and inconsistent. Social Security and public agency pension benefits are treated differently by Federal tax law. While feral income tax is collected on public agency pensions, Social Security benefits are sheltered, often completely, from this tax. State community property laws may treat them differently, also. Due to these two differences, a public pension should not be sued to offset the amount of Social Security earned. (Social Security Fairness)

The reason these measures were passed was to balance out the division of Social Security benefits. This is because, the SSA uses a formula for computing the primary insurance amount (the "PIA," roughly speaking, is someone's Social Security benefit). The formula provides individuals with low average lifetime wages a proportionally higher rate of return on their contributions to Social Security than individuals with relatively high average lifetime wages. As a result, if you are a lower-paid worker, you will receive a Social Security benefit equal to about 60 percent of your pre-retirement earnings. By contrast, if you are a higher-paid individual, your average replacement rate is about 25 percent. (NEA)

(Figure omitted for preview. Available via download).

However, the way these measures were enacted did not accomplish this goal, but affected the wrong group disproportionately. These measures are in no way minor or arbitrary, and have huge potential to rob hard working educators. A few facts about the GPO/WEP emphasize the mistake that passing them were, and that they must be repealed:

• GPO: 74% percent of those affected by GPO lose their entire spousal benefits. According to the 2013 Congressional Research Service Report, in December of 2011 the average yearly public pension for those affected by the GPO was $24,780. 

• WEP: The WEP was not designed to affect the middle or low wage earners that it can deeply penalize. WEP cuts to earned benefits are substantial, commonly causing serious lifestyle reductions. Someone with a pension of only $900 a month from a ‘non-covered’ government job can have his/her earned monthly Social Security benefits cut from $600 to $300.

• The GPO, particularly represents discrimination against women. The GPO currently penalizes more than one half million retirees; 79% of them are women….the average non-covered government pension for men was $961 more per month than the pension paid to women. (Social Security Fairness)

(Figure omitted for preview. Available via download).

This Social Security injustice not only harms people in the short term but if not repealed it has long lasting implications for education health. These measures do not incentivize the best and most capable teachers from entering the job. This is especially true at a time when much other reform is working to support students and close the achievement gap, “We should be encouraging the best and brightest to enter the teaching profession and help groom the next generation of leaders in this country, not punishing those who aspire to a life of public service” (Education Votes).

This year congress has been reconsidering the effects of the GPO/WEP. While there have been preliminary efforts they have not been broad enough to cover the extent of the damage. For instance, the National Education Association has serious concerns about one of the proposals on the table—while the Equal Treatment of Public Servants Act (H.R.711) addresses inequities perpetuated by WEP, it leaves the GPO intact and could actually broaden its application and enforcement. (Litvinov)

The Social Security Fairness Act of 2015 (H.R. 973/S.1651) would right this wrong, and allow the function of Social Security to return to normal. The sooner this is accomplished the better, for everyday that the injustice remains more and more people lose their earnings and are discouraged from doing the difficult work of teaching the neediest children in America. While great amounts of funding has gone to support ending achievement gaps, undermining teachers in this way will also undermine that effort. 

Conclusion

Ultimately the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP) was a careless mistake with damaging consequences. A result of poor policy preparation, and not ensuring the most valuable and vulnerable government employees are protected from such deviations from justice. Those who can least afford to lose their earned wages through Social Security are being hard hit by these measures, which must be repealed immediately.

Notes

1: Chart Retrieved from: http://bipartisanpolicy.org/blog/one-social-security-reform-that-democrats-and-republicans-agree-on/

2: Chart Retrieved from: http://socialsecurityintelligence.com/the-windfall-elimination-provision-repeal/

3: Chart Retrieved from: http://bipartisanpolicy.org/blog/one-social-security-reform-that-democrats-and-republicans-agree-on/

Works Cited

Education Votes. “GPO-WEP fix, the Social Security Fairness Act, fights unfair offsets that slash retirement benefits.”educationvotes.nea.org, 1 Jul. 2015. Retrieved from: http://educationvotes.nea.org/2015/07/01/gpo-wep-fix-the-social-security-fairness-act-fights-unfair-offsets-that-slash-retirement-benefits/

Litvinov, Amanda. “Congress rethinking GPO-WEP, controversial laws that penalize retired educators.” Education Votes, 23 Mar. 2016. Retrieved from: http://educationvotes.nea.org/2016/03/23/congress-rethinking-gpo-wep-controversial-laws-that-penalize-retired-educators/

NEA. “FAQs About the Windfall Elimination Provision.” Nea.org, 2016. Retrieved from: http://www.nea.org/home/17745.htm

NEA. “Social Security.” Nea.org, 2016. Retrieved from: http://www.nea.org/home/16491.htm

NEA. “Fact Sheet for Congressional offices: Government Pension Offset and Windfall Elimination Provision.” Nea.org, 2016. Retrieved from: http://www.nea.org/assets/docs/HE/TM-FactSHeetForConogressionalOffice.pdf

Social Security Fairness. “The Case For Repeal of the Punitive Government Pension Offset & Windfall Elimination Provision.” Ssfairness.com, 2016. Retrieved from: http://www.ssfairness.com/wp-content/uploads/2013/03/The-Case-for-repeal-of-the-GPO-WEP-rev.pdf