Congress continues to debate WEP, GPO
A solution to damage caused by Social Security provisions is not an easy one
By Michael Pramik, Ohio Public Employees Retirement System
May 30, 2024 – Congress recently held hearings on Social Security’s Windfall Elimination Provision and Government Pension Offset, issues of great importance to many OPERS members. Yet despite the recent Congressional action, little progress has been made toward addressing these offsets.
The House Ways and Means Committee’s Social Security Subcommittee met on April 16 to consider both provisions. While some current legislative solutions were discussed in passing, the subcommittee’s main goal was to gather information on the current state of play. Four witnesses representing think tanks, interest organizations and academia offered their thoughts regarding the WEP and GPO and provided their opinions regarding the best way forward.
Very little new information was provided, either in testimony or the subsequent question-and-answer segments, but the discussion offered some clues as to where this debate might go next, OPERS Government Relations staff members say.
If not repeal, then what?
Although the WEP and GPO are very important issues for OPERS and its members, it was noted several times during the hearing that these offsets affect only about 4 percent of Social Security beneficiaries. The implication is that any solution to help the minority should not disadvantage the majority.
This sentiment often was aimed at a proposed repeal of the WEP and GPO (H.R. 82, the Social Security Fairness Act), which has attracted significant bipartisan support. But the bill does not include any funding to pay for the relief it provides and would therefore result in a significant cost to the Social Security program, both in terms of dollars and solvency of the Social Security trust fund.
In many ways, the discussion echoed the statements made during the Ways and Means Committee hearing on the previous version of H.R. 82 in the last Congress, with some members indicating that while they supported the notion of repeal, they would prefer that it was fully paid for.
Subcommittee members uniformly acknowledged the difficulties facing public servants in non-covered states and agreed that something needed to be done. But they stopped short of endorsing any one solution.
Ideally, lawmakers would be able to build on their agreement that repeal of the WEP and GPO is too expensive and would seriously consider other solutions. For example, OPERS has supported the development of two proportional formula bills: the Public Servants Protection and Fairness Act, introduced by Ways and Means Committee Ranking Member Richard Neal (D-Mass.), and the Equal Treatment of Public Servants Act, introduced by Rep. Jodey Arrington (R-Texas). While not perfect, we believe these bills provide meaningful relief for our members who already have been impacted by the WEP, as well as a change to the current WEP calculation that is meant to better tailor any future offsets to our members’ individual work histories.
However, in the absence of an agreed upon alternative to repeal (there are meaningful differences in grandfathering between Neal’s and Arrington’s bills), lawmakers have been hesitant to turn the page and enthusiastically support something else. That’s especially true given the significant number of bipartisan cosponsors who have signed onto repeal measures such as H.R. 82 (320, at last count). As a result, advocates have had little incentive to change their stance on repeal or push lawmakers to consider other options.
A small fish in a very big pond
Given the relatively low number of people impacted by the WEP and GPO, legislators have increasingly used hearings on these offsets as opportunities to talk about the need for general Social Security reform.
As the “third rail” of American politics, Social Security reform is a difficult topic, especially in an election year. However, the declining fiscal health of the Social Security trust fund has made the topic of reform difficult to ignore. Unsurprisingly, this situation leads to the same type of messaging issues as WEP and GPO reform, only on a much larger scale. In both cases compromise will be needed to address the problems, but there is little urgency to act before difficult changes are absolutely necessary.
Given the significant projected costs of shoring up Social Security’s finances, it is understandable that WEP and GPO reform would fall within that larger discussion. However, that approach presents its own set of risks. First, there is no guarantee that lawmakers will address the WEP and GPO in the context of Social Security reform because of the relatively low number of people affected. That’s why OPERS continually raises the WEP and GPO with members of Congress and encourages our members to do the same.
Second, even if the WEP and GPO are addressed as part of a larger Social Security reform effort, we have no assurance that the solution will not be harmful to public retirement systems in non-covered states. OPERS traditionally has tried to separate reform of the provisions from broader discussions about Social Security, and we believe that continual education regarding the harms of “solutions” such as mandatory or universal coverage of public servants in non-covered states is necessary.
What makes mandatory or universal coverage so dangerous is that, in addition to “solving” the WEP and GPO problem for newly hired public employees, it is also projected to provide a small amount of funding for the Social Security trust fund in the near term. That could divert contribution income away from OPERS to fund new contributions to Social Security. We must remain vigilant against any proposed solution that could materially harm OPERS and its members.
What’s ahead
OPERS staff will continue to advocate for meaningful WEP and GPO relief and participate with lawmakers like Representatives Neal and Arrington in efforts to accomplish that goal. We understand that these offsets materially diminish our members’ retirement security, and we share their belief that it is beyond time to act.
However, it’s important to understand the reality of the situation we’re facing. According to the 2024 Social Security Trustees Report, the Social Security trust fund is less than a decade away from insolvency. This fact is going to take precedence in any discussion about the future of the Social Security program. That said, we will continue to remind our lawmakers of the terrible toll these poorly drawn offsets have taken.
As always, we ask that our members partner with us by continuing to contact their members of Congress, sharing their individual stories of how they have been impacted by the WEP and GPO, and urging their elected officials to support timely relief that can be enacted into law.
Michael Pramik
Michael Pramik is communication strategist for the Ohio Public Employees Retirement System and editor of the PERSpective blog. As an experienced business journalist, he clarifies complex pension policies and helps members make smart choices to secure their retirement.
I have paid into the Social Security system and feel should get be able to get the entire amount. Obviously, if I had not paid into the system, then I would not deserve anything. How about all of the lawmakers who retire as millionaires and write books and go out on speaking engagements? If all of the Washington “big shots” took reductions, Social Security would be around for decades!
I’ve been working with National group for past 3 years. Neal and Arrington who replaced Brady want to give us $100 or $150 a month to fix this injustice!! I’m losing $500 a month and this fix is certainly not fair! I understand Neal grew up on SS living with his Grandmother and even was a teacher for awhile so one would think he would understand how devastating this can be to many people!! If those people who make over $400,000 a year had to pay their fair share of SS the problem most likely would be fixed!! If politicians were affected by this it would have been fixed years ago!!
I am 70 years old and continue to work. I have paid over the number of quartets required to receive the full Social Security retirerment benefit. As a mater of fact, as a self employed person I pay 15.5% every year of my aftet tax income. It is unjust that I am not able to collect my full benefit. When I inform others of this fact, all agree it is not fair. I should not be penalized for this unjust law regardless of the percentage of people it impacts or the status of the Social Security Trust Fund. I am an American and should be eligible for this benefit instead of being discriminated against for being a public employee.
I worked a part time job to get enough SSA quarters to qualify while working a full time OPERS job to have retirement benefits. Just asking for what I contributed instead of the federal government keeping 50%. If the federal government would quit giving money to everybody and everything coming and going and use some common sense on some of the government programs that they fund, and start addressing government corruption, Social Security benefits would be solvent for the next 100 years.
I worked 20 yrs under SS. The company closed and I worked 25 yrs under OPERS. My understanding is only 9 states have WEP in play. We should get all we deserve from SS.
Thank you
I have a neighbor who gets about $4000.00 a month tax free military disability. He also collects $1700.00 Social Security Disability. His wife gets 1700.00 Social Security disability. I started working and paying into SS at 16 and worked outside jobs all through my law enforcement job and get $19.00 after paying my Medicare. Is Social Security Disability part of the Social Security Trust Fund? That never seems to be addressed, they only talk about baby boomers as the problem.
To give you actual figures of how this affects a person’s retirement. I started collecting social security at 64 to the amount of 1200 a month. I retired from our neighborhood school as a staff employee with a pension of 1300. And my social security was dropped to 317.00 and 174 of that goes to Medicare. So it is pretty shocking. Spousal benefits were eliminated as well. I worked in the public sector and paid and so did my husband. I worked more at the school to help but really got penalized. Anything happens to my husband I am sunk.
I worked 40 years in our Maximum Security Prison as a nurse/Social Worker Yes I received a pension which I earned! Realizing that I needed to get my Social Security quarters I returned to work at said Prison as a contract employee and worked until I was 70! What a slap in the face when I found out what my benefit would be!Thanks for robbing me of my money! We dole out money to everyone else yet ignore this injustice! Where did my hard earned money go????Congress should be ashamed to continue this inequity!Yes shame on you!!!
I am 67 full retirement age working for licking county office in Ohio and taking my social security monthly benefit but holding off on my opers until I decide to retire from county. Worked at jobs for 34 years collecting social security and now 11 years with opers. Cannot afford to retire if social security reduces my monthly benefit when I start collecting my opers also. In a dilemma if and when I can afford to ever retire.
Reducing Social Security payments due to OPERS and other non-contributory retirement plans makes no sense, and it’s not fair for several reasons. To name one, if the premise behind a tier structure being used in calculating Social Security (meant to allow lower income recipients a higher percentage of benefit per dollar earned) is to help poorer retirees, why does this WEP/GPO offset only effect certain retirement plans? For example, a federal or military pension is payable to even a low-income Social Security recipient with no WEP/GPO offset—despite that no FICA taxes were ever collected in earning that pension, either. In fact, most retirement incomes that people use to subsidize Social Security (and reduce the need for quarter percentage adjustments) have never been taxed FICA in any way—such as employer contributions to 401k’s, 401k and IRA profits (Roth profits have never even paid income tax of any kind), private pensions, and so on.
The principle here is the same: some people collecting certain kinds of retirement incomes that have no contribution basis in the Social Security system have to pay WEP/GPO while many others do not. We are talking about a principle when we cut people’s retirement by claiming that they don’t need as much Social Security. A person could theoretically have 2000 dollars a month military retirement, and 1000 dollars a month in Social Security and the Social Security would not be reduced at all—even though the basis for the military retirement never contributed to FICA (only the wages did in order to cover the recipients original Social Security claim, once). Another person could accumulate a million dollars in an IRA or inheritance over a lifetime and none of the profits or employer contributions bringing it to that amount were taxed FICA. Again, no Social Security reduction on them anyway. Employers do not pay FICA when privately funding retirements.
Most government employees do not know about WEP/GPO and don’t understand it well. Perhaps they would not have even taken on the job if they knew about it in the first place. State governments are not anxious to lose workers in hard-to-fill jobs, so they don’t exactly brag about WEP/GPO at the interview. When they finally learn about it, it’s often too late to make up for the difference they were expecting.
I have also paid fully in to the Social Security program. I began working at the age of 16 and have paid in some form in to Social Security since. Although I have worked full-time in the PERS program since 1997, I have had a part-time job and paid in to the social security program also. Due to the WEP program, my social security benefit at age 67 is reduced by almost 50%!
I should be able to draw my full benefit.
The WEP is unfair, pure and simple. This gives another reason for people who wish to teach or work in public service after working in “private sector” position pause. I also worked many jobs and paid into social security, just like everyone else. I worked next in PERS positions and later became a teacher. I did not retire with full benefits as a teacher because at retired short of 30 years. My pension was limited because I did not put into the mandatory years as a teacher and my social security was drastically cut because I did teach and worked in public service. Now teachers need to accrue 35 years to attain full retirement pension benefits. Quite frankly, many people enter the teaching profession at a later time in life. There is a teacher shortage in this country. Not a great way to attract teachers in the future.
I paid into social security for jobs I started at 16 years old and pay taxes now at 81 on my social security income every year. Also, my OPERS pension is not as large as many who had a state job for more years than I did. This is very unfair and greatly affect my ability to pay monthly bills. This is not a fair way to
keep social security stable. In fact, it is stealing. Please repeal the Windfall Elimination.
Thank you Jim Griffin November 11, 2024