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Old 10-17-2014, 10:55 AM   #41
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My husband worked for a university and his pension is from the teacher retirement system. However, at the university, he paid into social security as well as teacher retirement, and will receive both. When we attended a pre-retirement information session, I was surprised to see many of the teachers present hadn't realized they weren't going to also get social security. In fact, they were angry that the university employees would get it. The session leader tried to explain that teachers had voted not to participate in SS in the 1950's. It was a very heated meeting. I couldn't understand how they couldn't have known this in making their future plans.


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Though it is probably no different than any other subset, I have seen in teachers some of the most frugal conscientious investors and on the opposite end some of the dumbest that boggles the mind. How do you expect to get something you don't pay into? What is worse some of them can go 30 years and never know what was even deducted from their check even though there is a statement given every month. No wonder companies like to stick hidden fees into bills, they know most won't even bother to notice.


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Old 10-17-2014, 11:11 AM   #42
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There are two problems here as far as I can see, both based upon people not know the facts about how things work:

1. People who don't participate in SS, and for whatever reason, don't realize that means they won't be eligible for benefits, even spousal benefits in their retirement years. That should be made clear up front and reinforced yearly so that they can prepare for it.

2. People who don't realize that not having to pay SS is as benefit in and of itself. Call it the didn't have to pay SS benefit. In effect, to get the didn't have to pay SS benefit, they traded away their right to the surviving spouse benefit. From the article:

Quote:
Alice thinks she and other teachers are being singled out for Social Security penalties. What she doesn't understand is the law treats her the same way her neighbor Carol has always been treated. Again, it says that neither woman will get a dependent wife's benefit from Social Security because she is getting her own retirement pension.
Think about it. The author is right. Without the GPO/WEP laws, the person who did not pay SS would get two SS benefits; the didn't pay SS benefit and the SS spousal benefit. Meanwhile people who did pay SS would either get there own SS benefit or the SS spousal benefit, whichever is higher. But, they only get one SS benefit.

There's also this:
Quote:
And the GPO law actually gives teachers a bit of a break. Social Security retirement pensions offset spousal benefits dollar for dollar. But a teacher's retirement pension causes only a three-for-two offset. In other words, for each $3 you receive in a teacher's pension, you lose only $2 from Social Security spousal benefits.
Clear as mud, right?

Note: FWIW, I am a former career teacher and believe teacher's have some legitimate grips in terms of compensation, but this is not one of them. In regards to retirement, teacher's would be better off working on things like 403B plans with outrageous fees, and poor performing managed funds. Those are the true ripoffs, IMHO.
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Old 10-17-2014, 11:24 AM   #43
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I never understand the thinking unless it comes from lack of expertise in the SS system. My husband and I both paid into SS for over 40 years. As the higher earner I will also lose 100% of his SS if he predeceases me. Why should a spouse with a non-SS pension (no contribution) get a better deal than a spouse who did pay in?

WEP is a reduction ( up to 50% ) in benefits accured, I stand corrected.
GPO often eliminates elgiblity for benefits completely.


What don't you understand about the thinking? That there are two sides to this issue, ? , I do know that there are knowledgeable people with expertise on both sides. I have plenty of expertise in how the SS system works as least as far as GPO and WEP go. I can see quite clearly both sides of the argument.
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Old 10-17-2014, 11:43 AM   #44
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I read these stories. While I am sad for those who are suffering financially, they really are asking to get a better deal than those couples where both paid into SS. That's simply not fair.
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Old 10-17-2014, 11:43 AM   #45
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Think about it. The author is right. Without the GPO/WEP laws, the person who did not pay SS would get two SS benefits; the didn't pay SS benefit and the SS spousal benefit. Meanwhile people who did pay SS would either get there own SS benefit or the SS spousal benefit, whichever is higher. But, they only get one SS benefit.
Re: didn't pay SS benefit?

WEP reduces the amount of a social security benefit that is accured. If a person did not work under social security then there is no social security benefit to reduce. You have to have earned a social security pension in the first place.

GPO affects people who have not accured a social security pension in their own name. but would have been eligible for the same spousal benefit as say a non working spouse.

In no case does anyone get two benefits. In any event social security has many loopholes and eligiblity rules that may or may not be fair. (ie) retirees that support minor children and get SS for them
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Old 10-17-2014, 11:55 AM   #46
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I fall into the category of people who paid into SS early on in life, enough to qualify for benefits, but then through the rest of my career, either didn't pay into the system anymore beyond basically qualifying, or else did pay into the system, but didn't pay enough to receive credit for those years. I earned my 40 "quarters) from high school through my active military years, and then went to work for the federal govt. under CSRS, where no SS was withheld from my paychecks. However, for all the years I was a reservist, SS WAS withheld from my military paychecks. Apparently though, the amount withheld didn't reach the magic threshold to quality as "substantial" earnings. So....I did pay a smaller amount into SS for nearly 28 years as a reservist, while simultaneously working as a fed employee. Total of 37 1/2 yr career. The only SS credits I have though, are the ones I earned from 1973 through 1981. Thus, my SS check at age 62 is calculated to be around $250 per month. I'll take it.
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Old 10-17-2014, 12:10 PM   #47
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I would take the never pay social security never get social security deal every time. Sounds great.


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Old 10-17-2014, 12:18 PM   #48
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In no case does anyone get two benefits. In any event social security has many loopholes and eligiblity rules that may or may not be fair. (ie) retirees that support minor children and get SS for them
The person who did not pay into SS would get two benefits.

One would be a bigger pension since he/she and the employer put what would have been SS dollars into the pension fund to beef it up. I think that is what many people are overlooking. By not having to pay SS, the person should be getting a bigger pension since more $$'s are put into it. If the money not paid to SS was not put into the pension plan, then that person got to keep anywhere from 4-6% more of their pay than the person who did pay into SS. Either way the non SS payer benefits: Either with a bigger pension payment, or by keeping more of their paycheck.

The second benefit would be the survivor benefit.

However, I doubt we will see eye to eye on this so...

I think we will have to agree to disagree.
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Old 10-17-2014, 12:32 PM   #49
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The person who did not pay into SS would get two benefits.

One would be a bigger pension since he/she and the employer put what would have been SS dollars into the pension fund to beef it up. I think that is what many people are overlooking. By not having to pay SS, the person should be getting a bigger pension since more $$'s are put into it. If the money not paid to SS was not put into the pension plan, then that person got to keep anywhere from 4-6% more of their pay than the person who did pay into SS. Either way the non SS payer benefits: Either with a bigger pension payment, or by keeping more of their paycheck.

The second benefit would be the survivor benefit.

However, I doubt we will see eye to eye on this so...

I think we will have to agree to disagree.


Actually, personally I do not have a huge problem with either WEP or GPO, we are affected by both. I am just compassionate and understanding of people who suffer financial hardship because of confusing and difficult to understand rules. Some states ie Texas comes to mind, pay low pensions, and teachers can get screwed. And I for one hate to see a teacher wind up in poverty after a long career.
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Old 10-17-2014, 12:53 PM   #50
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The person who did not pay into SS would get two benefits.

One would be a bigger pension since he/she and the employer put what would have been SS dollars into the pension fund to beef it up. I think that is what many people are overlooking. By not having to pay SS, the person should be getting a bigger pension since more $$'s are put into it. If the money not paid to SS was not put into the pension plan, then that person got to keep anywhere from 4-6% more of their pay than the person who did pay into SS. Either way the non SS payer benefits: Either with a bigger pension payment, or by keeping more of their paycheck.

The second benefit would be the survivor benefit.

However, I doubt we will see eye to eye on this so...




I think we will have to agree to disagree.
I get it you were talking about not paying the FICA SS tax. Sure that is a benefit.

But remember you not required to pay in to receive social security in many circumstances. Spousal, dependent children, non working homemaker, disabled etc...

and social security payouts due to the "bend" points have little to do with how much you paid in, it is after all an insurance program
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Old 10-17-2014, 12:55 PM   #51
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<snip> I am just compassionate and understanding of people who suffer financial hardship because of confusing and difficult to understand rules. Some states ie Texas comes to mind, pay low pensions, and teachers can get screwed. And I for one hate to see a teacher wind up in poverty after a long career.
+1

Toss in those lousy 403-b providers who charge high fees for sub standard performance, and there is plenty to correct.
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Old 10-17-2014, 01:38 PM   #52
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Actually, personally I do not have a huge problem with either WEP or GPO, we are affected by both. I am just compassionate and understanding of people who suffer financial hardship because of confusing and difficult to understand rules. Some states ie Texas comes to mind, pay low pensions, and teachers can get screwed. And I for one hate to see a teacher wind up in poverty after a long career.

Same here. Although my attitude didn't change until I understood "bend points" and reasoning behind it. The only info the teachers association here ever mentions is trying to overturn it because money is being stolen from you. They never educate the rationale behind it all. At least there is a justifiable reason behind it. Though the one part I do not like that probably trips up a few teachers is people who move across state lines from a SS/Pension system, into one that does not contribute. So instead of getting 2 half pensions, they get a half and less from other one because the WEP kicks in.


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Old 10-17-2014, 02:00 PM   #53
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Same here. Although my attitude didn't change until I understood "bend points" and reasoning behind it. The only info the teachers association here ever mentions is trying to overturn it because money is being stolen from you. They never educate the rationale behind it all. At least there is a justifiable reason behind it. Though the one part I do not like that probably trips up a few teachers is people who move across state lines from a SS/Pension system, into one that does not contribute. So instead of getting 2 half pensions, they get a half and less from other one because the WEP kicks in.


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Old 10-17-2014, 02:21 PM   #54
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Note: FWIW, I am a former career teacher and believe teacher's have some legitimate grips in terms of compensation, but this is not one of them. In regards to retirement, teacher's would be better off working on things like 403B plans with outrageous fees, and poor performing managed funds. Those are the true ripoffs, IMHO.

I was not a teacher in the usual sense, but have similar experiences. I was never given out-of-this-world pay (no six figures), but we are fortunate to have a 403(b) plan with good choices from multiple providers (Fidelity happens to be my choice).

You just have to put away money, and regularly.
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