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Letter to House Ways and Means Committee on GPO/WEP

July 12, 2016

Dear Representative: 

On behalf of the three million members of the National Education Association and the students they serve, we would like to offer our views on the Equal Treatment of Public Servants Act of 2015 (H.R. 711), which is scheduled to be marked up tomorrow. We appreciate that this bill addresses inequities perpetuated by the Windfall Elimination Provision (WEP), but are concerned that it leaves the Government Pension Offset (GPO) intact and that it creates a new WEP formula that would be applied more broadly than the current formula—specifically, to people without a vested right to a public pension. 

NEA strongly supports full repeal of both the GPO and the WEP. We are, however, open to incremental steps towards full repeal.

The WEP reduces the Social Security benefits of 1.3 million people who also receive public pensions from work not covered by Social Security—for example, educators and other dedicated public servants who must take part-time or summer jobs to make ends meet. The bill under consideration would replace the WEP with a new Public Service Fairness (PSF) formula for people who turn 62 during or after 2017. Under this formula, the Social Security Administration would take into account the years a public sector employee paid into Social Security versus the years that employee paid into a public pension system while working in a position not covered by Social Security. Benefits would be calculated as if all the worker’s earnings were subject to Social Security taxes, and then multiplied by the percent of earnings covered by Social Security. We commend this attempt to address the WEP’s inequities, but are concerned about its impact on beneficiaries—who wins and who loses. Further analysis of the types of earnings and pension-receipt patterns that lead to higher or lower benefits under the new PSF formula is needed.

Another serious concern is that the bill fails to address the GPO, which reduces Social Security spousal and survivor benefits and affects a far larger number of people. Nationwide, more than one-third of educators and more than one-fifth of police officers, firefighters, and other public employees are not covered by Social Security and are, therefore, subject to the GPO. An estimated 9 out of 10 public employees affected by the GPO lose their entire spousal benefit, even though their deceased spouse paid Social Security taxes for many years. The impact is harshest for those who can least afford the loss: lower-income women. Once the GPO kicks in, some have so little money they must turn to food stamps.

While we appreciate that H.R. 711 attempts to correct inequities in the current WEP formula, we are concerned about potential reductions in the Social Security benefits of people who do not have a vested right to a public pension and the universe of beneficiaries who would no longer be exempt from the offsets because they have 30 years of Social Security-covered earnings. Another concern we previously raised—fiscal challenges associated with enforcement of offset provisions for existing Social Security beneficiaries identified as having received overpayments—can be addressed by having the bill remain silent on the issue of enforcement. In addition, Congress should consider reasonable policy safeguards to protect vulnerable retirees living on fixed incomes who could be targeted for collection of past Social Security overpayments.

We support the following amendments, which seek to address some of our concerns:

  • Rep. Danny K. Davis (D-IL) amendment that would exempt people without a vested right to a public pension from the new WEP formula 
  • Rep. Bill Pascrell, Jr. (D-NJ) amendment that would exempt people who work in a Social-Security covered job for 30 or more years from the new WEP formula
  • Rep. Bill Pascrell, Jr. (D-NJ) amendment that would establish a transition period for people with more than 10 but less than 30 years of Social Security-covered earnings when the bill is enacted; the Social Security Administration would calculate their benefit under both formulas (current WEP formula and the new PSF formula) and automatically pay the higher amount

The following excerpt from a letter to NEA is but one example of the devastating impact of the GPO, which is not addressed by H.R. 711:

My husband was diagnosed with glioblastoma, the most aggressive type of brain cancer. After surgery, radiation and chemotherapy, his sight was affected so he could no longer drive or read. Therefore, he could no longer work as a real estate appraiser. We lived on my teacher retirement pension, my small Social Security benefit ($250 a month before Medicare), and his Social Security check of $1,600. It was an adjustment having one income totally lost, but with careful management and no unforeseen unexpected expenses we could do it. My husband lost his battle in April. Within two weeks of his death his Social Security benefit no longer was coming. After a phone interview with a Social Security representative, I found out that I would see none of it. Now my income was almost cut in half again. Trying to deal with his death was compounded immeasurably by this huge loss financially. I still wonder how I am going to make it. My husband worked all his life and paid into Social Security. He was in the Marines and the Army and was a Vietnam vet. I worked as a teacher of young children most of my life as well as other jobs to earn my Social Security benefit.—Heidi from Maine

We thank the House Ways and Means Committee for considering the vitally important issues associated with Social Security offsets—their resolution remains a priority for NEA and our members. We look forward to working with Congress to address these issues and thank you for the opportunity to offer these comments.


Mary Kusler
Director, Government Relations