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Paying the Price for Federal Service

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GPO and WEP: Paying the Price for Federal Service
by Michael McDowell, for FEA
From the February, 2002, FEA Journal

If you are nearing retirement and counting on any type of Social Security benefit, a closer look at the effect of the Government Pension Offset [GPO] and the Windfall Elimination Provision [WPO] may be in order. Pay attention especially if you or your spouse can answer YES to any of the following:

You have worked as a public employee in any job not covered by Social Security.
You are currently covered by CSRS instead of FERS.
You work(ed) second jobs or summer jobs covered by Social Security.
You moved from a state where you earned Social Security to a location (overseas?) where your employment is not covered by Social Security.
You have changed careers (or are considering post-retirement careers) and become an educational employee after having served in the military or another field where you earned Social Security benefits.

If you or your spouse could answer YES to any of the above, the GPO or WEP may already impact the amount of your collective retirement dollars. If not, your future income may be in jeopardy--unless Congress takes action to reverse these two unfair provisions.

The Government Pension Offset [GPO] reduces public employees' spousal benefits by two-thirds of their public pension. EXAMPLE: You retire as a DODEA employee with a $1200/month CSRS pension and your spouse is also retired with a $1200/month Social Security pension for a total of $2400 per month. If your spouse predeceases you, your survivor benefit is cut by two-thirds of your pension [$1200 times 2/3 =$800] --leaving you with a $1600/month income and a loss of $800 a month. Depending on the circumstances, you could lose the entire spousal benefit.

The Windfall Elimination Provision [WEP] changes the formula used to calculate benefit amounts you or your spouse earned while working in a system covered by Social Security. EXAMPLE: You work in one system covered by Social Security for 17 years and move to another system not covered by Social Security and work an additional 14 years. According to the Social Security Administration, you would receive $540/month for contributions you paid in while working in the first system. However, because public employees in the state where you worked for 14 years are not covered by Social Security, your benefits are reduced by $196/month for a total of $344/month instead of the $540 entitlement you earned--due unfortunately to the Windfall Elimination Provision.

Although the GPO and WEP impact federal employees and retirees in almost every state, the following are States in which public employees are not covered by Social Security and are especially vulnerable: Alaska, California, Colorado, Connecticut, Georgia (certain districts), Illinois, Louisiana, Kentucky (certain districts), Maine, Massachusetts, Missouri, Nevada, Ohio, Rhode Island, and Texas. Your choice of relocation in the United States for retirement purposes or further employment could certainly be guided by what action Congress takes in the House of Representatives (H.R. 82) and the Senate (S.206) to repeal the GPO and WEP.

What can you do?

Speak to your friends and colleagues about these two unfair penalties. The numbers of affected federal employees will only grow as people near retirement age. Write or email your Members of Congress. We already face a national teacher shortage. Let them know that public government employees deserve better treatment and that future federal educators and educational support professionals warrant opportunities free of economic suppression--if indeed we are to continue to attract them.

NEA is at your service to deliver your messages to those that can make a difference.

Please visit: http://www.nea.org/lac/socsec/offsets.html and type in your stateside local zip code.

IMPORTANT: This information should not be downloaded using government equipment, read during duty time or sent to others using government equipment because it suggests action to be taken in support or against legislation.


For other resources associated with this article, please visit:
NEA
AARP
Social Security