Getting rid of WEP and GPO?

[Chuckanut]

Not exactly. I worked for 3 different counties in California all participating in the CalPERS pension system.
1 county I worked for opted out of SS participation back in the 80's - I think 1983. I worked there for 20 years. The standard line was that the county would pay the employee portion of the CalPERs pension because they didn't have to pay the employer portion of SS. They did do this for a while but so did the other counties that did participate-see where I'm going with this!
Then it was oh, were going to give you a raise but you have to start paying for your portion of CalPERs. Seems fair enough if you don't know the background of why the county was paying it.
Then the laws changed and the counties could not pay the employee portion.

I retired at age 63 and the formula for my pension was basically the same percentage. The difference for the counties participating in SS is that $133 was subtracted from my monthly earnings when doing the pension calculation-so that did happen but I can tell you the difference in my PERs amount was minuscule. Before I retired I could run different scenarios and lie to the system-so I ran it with and without that $133 deduction. I can't remember the amount but it was not a blip on the radar. I had a spreadsheet with it back before I retired but I think I deleted all of them. I had lots of scenarios going.

I agree with you that opting out of SS participation shouldn't be allowed and I also think the cap on earnings should be done away with. But I think a lot of things!

IOW, the politicians hornswaggled a lot of county workers. Another reason to do away with SS exemptions.

 

[ERD50]

It sounds like politicians have messed things up.

IMO, the easiest solution is simple: everybody pays into SS. Period. No exceptions.

Yes, but that ship has sailed.

 

[RetiredHappy]

Since it passed the House, what does it require to pass in the Senate? Is it a simple majority of 51, or 60, or two-thirds to repeal it?

60. But senate already has 62 votes for their own version of repeal. If the same 62 senators vote to approve this, then it will go through.

 

[Chuckanut]

Here’s an interesting discussion of what states have the most and least people hit by WEP and GPO.

The share of Social Security beneficiaries affected by the GPO varies widely by state (see Figure 1). States with a relatively larger share of GPO-affected beneficiaries are usually those with a larger share of state and local government employees not covered by Social Security or those with more CSRS retirees.

Report Shows Where Social Security GPO, WEP Reductions Hit the Most

Following is a new brief report from the Congressional Research Service showing the differing impacts by state of the Social Security government pension

www.fedweek.com

 

[Irishgirlyc58]

IOW, the politicians hornswaggled a lot of county workers. Another reason to do away with SS exemptions.

Yep!

 

[flyoverstate]

I would like just one reason why my spouse, who paid into SS for 13 years, should not get MY spousal benefit, when I paid the max into SS for over 35 years? If they had simply quit working after their 13 years of paying into SS, they would be eligible for their full benefit based on that 13 years, AND they would be eligible for my spousal benefit. Under WEP and GPO, their benefit is reduced by 40%, and they get NOTHING if I should die before they do.

Thanks.

 

[flyoverstate]

Colorado is at the epicenter of WEP and GPO impacts. No state workers are allowed to contribute to SS, because then the state would have to contribute their share. Currently, the state pays *less* into the retirement plan than they would pay into SS. They have consistently "deferred" payments to PERA (Colorado employee's retirement plan), and now the plan is way underwater. The state of Colorado would not be able to defer payments to SS, if workers had to pay into SS. PERA is basically insolvent at this point. They won't say the word "insolvent", but the latest independent audit said that if the state government does not immediately infuse $2 Billion into the plan, it is toast.

The bottom line is that anyone currently accepting a job with the state of Colorado, expecting a pension after 25 years, is a fool. It isn't going to happen. And since you are prohibited from contributing to SS, you won't have that, either. If you have already contributed 40 quarters to SS, you *might* get some portion of that, it depends on the outcome of the WEP/GPO repeal.

 

[Chuckanut]

Colorado is at the epicenter of WEP and GPO impacts. No state workers are allowed to contribute to SS, because then the state would have to contribute their share. Currently, the state pays *less* into the retirement plan than they would pay into SS. They have consistently "deferred" payments to PERA (Colorado employee's retirement plan), and now the plan is way underwater. The state of Colorado would not be able to defer payments to SS, if workers had to pay into SS. PERA is basically insolvent at this point. They won't say the word "insolvent", but the latest independent audit said that if the state government does not immediately infuse $2 Billion into the plan, it is toast.

The bottom line is that anyone currently accepting a job with the state of Colorado, expecting a pension after 25 years, is a fool. It isn't going to happen. And since you are prohibited from contributing to SS, you won't have that, either. If you have already contributed 40 quarters to SS, you *might* get some portion of that, it depends on the outcome of the WEP/GPO repeal.

Based upon your comments, IMO, Colorado’s entire government retirement system seems to need reform. It’s going to take a lot more than WEP and GPO reform to fix what you have described.

What happens to these workers if the great SS benefit reduction actually takes place in the 2030’s?

 

[RetiredHappy]

Based upon your comments, IMO, Colorado’s entire government retirement system seems to need reform. It’s going to take a lot more than WEP and GPO reform to fix what you have described.

What happens to these workers if the great SS benefit reduction actually takes place in the 2030’s?

These workers don't get SS anyway unless they had jobs before or after working for the CO government. CO government will go into bankruptcy court and wipe off their pension obligation, but we know it won't happen. Many state pension funds are in similar situation, including California. In the case of California, they will keep taking money from the general fund to fill in the shortfall. I am only familiar with California.

 

[Irishgirlyc58]

These workers don't get SS anyway unless they had jobs before or after working for the CO government. CO government will go into bankruptcy court and wipe off their pension obligation, but we know it won't happen. Many state pension funds are in similar situation, including California. In the case of California, they will keep taking money from the general fund to fill in the shortfall. I am only familiar with California.

I don’t believe that CalPERs takes money from the state general fund.
The state must contribute a certain percentage for each employee to CalPERs for the shortfall which was voter approved about 10 years ago. If the employee is paid with general funds then this percentage would come from the general fund.

 

[Texas Proud]

Interesting. I thought to repeal a previous act (law), it required 60, but I'm not sure on that. Supposedly they have (or had) 62 tentatively on board, but that could easily change for a variety of reasons.

It takes 60 votes to get rid of a filibuster...

Only 51 to pass a law... (technically only 50 and then the VP gets a vote and can pass it)....

 

[athena53]

The reasoning behind these laws was that the SS formula is heavily-weighted towards low earners and people who have access to pensions have credits towards that pension in addition to SS.

Having said that- it does seem unfair, especially now that many have pointed out that the public pensions opted people out of SS in return for a less-valuable plan of their own (with lower contributions than for SS). It's also got to be a major issue with Survivor benefits. Not all public pensions have a Survivor benefit so the surviving spouse could be left with maybe a minimal SS benefit.

I hate to see any expansion of SS benefits that would decrease its solvency but at the very least we could eliminate the penalty on the Survivor benefit. We might actually save money overall by not having to support impoverished widowed seniors with social programs.

 

[Chuckanut]

These workers don't get SS anyway unless they had jobs before or after working for the CO government. CO government will go into bankruptcy court and wipe off their pension obligation, but we know it won't happen. Many state pension funds are in similar situation, including California. In the case of California, they will keep taking money from the general fund to fill in the shortfall. I am only familiar with California.

I was wondering if the Colorado pensioners might come out ahead of we SS participants if the Feds never ‘fix’ SS. Granted, That seems unlikely, but strange things happen in DC these days

 

[MarieIG]

If there were no GPO, I may have made a different decision on claiming age. Too late to fix that now. But I sure won't complain about the extra income if the bill passes and the young wife can start getting a spousal benefit.

If this passes - you may want to investigate the possibility of suspending between full retirement age and age 70.

 

[Sunset]

In my case I worked in England for over 10 years before migrating to the USA. Obviously I had no option to pay into SS before I moved there, but since I have foreign pensions they reduce my SS benefits since I did not pay into SS for at least 30 years.

Same here.
I paid into SS for many years, but won't get all my normal SS as I happened to work before coming to America.
I'll also get wacked by the penalty on the Survivor benefit.

Had I not worked before coming, I would get more SS in both cases.

 

[Montecfo]

Yes- it’s an adjustment that is made if you work for a government agency that did not participate in SS but you have SS quarters from other employment. The amount of your SS is reduced.
There is criteria around how many years etc for each end non participation and participation.

For example if you worked for the private sector for 15 years and then switched to teaching and taught school in a state where teachers are not allowed to participate in SS for say 25 years- your 15 years of qualifying quarters will be reduced by an amount determined by the year you turn 60-or 62 I can’t remember which now!

Yes. But the trigger is drawing a pension based on the non SS employment as I understand it. Not just working in such a job. A nit perhaps.

 

[flyoverstate]

I was wondering if the Colorado pensioners might come out ahead of we SS participants if the Feds never ‘fix’ SS. Granted, That seems unlikely, but strange things happen in DC these days.

It depends on what happens with the CO plan (PERA). More cuts are looming for people in that plan. The plan has been cut SEVEN times in the past 20 years already. One of the latest proposals is to further reduce the cost of living adjustments from 1% per year to 0.5%. Imagine if you had retired in 2019, and since then your income had only gone up by 5%, while inflation since then has been 23%. Many PERA retirees are already drowning. Remember that the vast majority are not eligible for SS at all, and those that did work a SS-eligible job for ten plus years are cut by WEP and GPO.

Yet another advantage of SS over Colorado's public employee pension. At least SS recipients can count on some semblance of COLA.

Colorado policymakers asked PERA what it would take to bolster its odds of full funding. The answer: $13 billion.

The Colorado Public Employees’ Retirement Association has less than a 50-50 chance of reaching its goal of full funding by 2048

coloradosun.com

 

[Irishgirlyc58]

Yes. But the trigger is drawing a pension based on the non SS employment as I understand it. Not just working in such a job. A nit perhaps.

Yes! I failed to mention that-I'm so used to being around government and/or school employees/retirees I didn't even think about those who are not familiar with the pension portion.

 

[Midpack]

I would like just one reason why my spouse, who paid into SS for 13 years, should not get MY spousal benefit, when I paid the max into SS for over 35 years? If they had simply quit working after their 13 years of paying into SS, they would be eligible for their full benefit based on that 13 years, AND they would be eligible for my spousal benefit. Under WEP and GPO, their benefit is reduced by 40%, and they get NOTHING if I should die before they do.

Thanks.

Because you and your spouse knew those were the stipulations at the time - and you could have taken another job that wasn’t affected if you didn’t agree with the stipulations. I assume the promise of a pension was a factor, and a conscious choice to accept the Sec condition when you accepted the job. I fully understand why affected employees don’t think it’s fair, but Congress should have fixed it long ago if not from the beginning. I’m all for correcting problems going forward, not always when it’s retroactive. That said if it passes I won’t complain even if it moves insolvency up 6 months from what I’ve read.

 

[Irishgirlyc58]

Because you and your spouse knew those were the stipulations at the time - and you could have taken another job that wasn’t affected if you didn’t agree with the stipulations. I

These are really big assumptions and from my own personal experience quite inaccurate.

 

[flyoverstate]

Because you and your spouse knew those were the stipulations at the time - and you could have taken another job that wasn’t affected if you didn’t agree with the stipulations. I assume the promise of a pension was a factor, and a conscious choice to accept the Sec condition when you accepted the job. I fully understand why affected employees don’t think it’s fair, but Congress should have fixed it long ago if not from the beginning. I’m all for correcting problems going forward, not always when it’s retroactive. That said if it passes I won’t complain even if it moves insolvency up 6 months from what I’ve read.

Actually, we did NOT know about WEP and GPO at the time my spouse became a teacher, and speaking with others, they did not know, either. It isn't like they advertise that in the job interviews. She started teaching before the internet was a thing. My spouse was a good ten years into teaching before we found out about WEP/GPO. In hindsight, she would never have become a teacher had she known, and quite frankly, the fact that information is more readily available now is one of the reasons there is a shortage of government workers, especially teachers, in states where state employees with prior SS earnings are subject to WEP/GPO. It used to be pretty common for people to switch to teaching from a different career, now, at least in CO, the word is out that in addition to abuse from parents, students and administrators, and low salaries, the pension sucks, and even if you do already happen to have ten plus years in a SS job, you will lose a large portion of your SS benefits and be ineligible for a spousal benefit if you become a teacher. Changing WEP and GPO would help recruit teachers, police, fire, and other public servants. The teacher and police shortage is real. Colorado now has a provision creatively called the "Shortage Mechanism" whereby basically unqualified teachers can be hired into openings, in some cases, classroom teachers don't even need a degree of any type, let alone a teaching degree.

 

[Time2]

I don't know why this can't be fair. If you are subject to WEP, but paid some SS, you should get a SS check to reflect the amount you paid in. And as a surviving spouse, this get more complicated. Which spouse had the WEP type income. Should their surviving spouse get only their smaller SS check? Are they covered under the pension after their spouses death that reduced their SS? I think there is more...

 

[Texas Proud]

It depends on what happens with the CO plan (PERA). More cuts are looming for people in that plan. The plan has been cut SEVEN times in the past 20 years already. One of the latest proposals is to further reduce the cost of living adjustments from 1% per year to 0.5%. Imagine if you had retired in 2019, and since then your income had only gone up by 5%, while inflation since then has been 23%. Many PERA retirees are already drowning. Remember that the vast majority are not eligible for SS at all, and those that did work a SS-eligible job for ten plus years are cut by WEP and GPO.

Yet another advantage of SS over Colorado's public employee pension. At least SS recipients can count on some semblance of COLA.

Colorado policymakers asked PERA what it would take to bolster its odds of full funding. The answer: $13 billion.

The Colorado Public Employees’ Retirement Association has less than a 50-50 chance of reaching its goal of full funding by 2048

coloradosun.com

In Texas there is NO COLA... you get what you get...

My oldest sister has been getting the same amount for over 25 years... they did give an extra check once and recently bumped her check up on a one time basis but not that much...

My old mega had a pension plan that did not have a COLA... you need to know what you are going to get when you join the firm and not complain about it later..

But I do disagree with them cutting... if they did that to people who already were getting benefits...

 

[zl55lz]

I haven't read all the posts so someone might have already mentioned this: I read an article this morning that repealing the WEP/GPO would only change (move up) the timeframe until the supposed social security funding "shortfall" by about 6 months, so that is insignificant in this issue. They will have remedied the shortfall long before then in one manner or another. I remember when they stated the shortfall would occur this decade. Didn't happen. There are a variety of ways to fund social security longer.

 

[zl55lz]

Anyone know/understand what the differences are between the House version which passed and the Senate version which is pending, i.e., what compromise might they suggest back to the House?