by Rhonda Briscoe and DeAnne Wellman Owre
Whether you are beginning your career as a speech-language pathologist or an audiologist or are considering your retirement options, you should be aware of two Social Security laws that could substantially reduce your benefits. You could be subjected to the federal Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) acts if you are:
- employed or considering employment as a state/federal employee (including public schools
- contributing to a state pension and not Social Security
- living in, have previously lived in, or are planning to move to Alaska, California, Colorado, Connecticut, Georgia, Illinois, Louisiana, Kentucky, Maine, Massachusetts, Missouri, Nevada, Ohio, Rhode Island, or Texas
The National Education Association (NEA) estimates that nine out of 10 public employees are adversely affected by the GPO and WEP. According to the American Federation of Teachers (AFT), these laws have the greatest impact on lower- to middle-income women and are considered discriminatory against those who have chosen to work in public employment. While government employers are obligated to inform potential employees about these laws, anecdotal reports suggest that many ASHA members become aware of the GPO and WEP only as they begin to consider retirement options.
The Social Security Act of 1935 laid the foundation for workers' retirement benefits. Since then, Congress has enacted many amendments, including GPO and WEP, to the original law. The GPO and WEP were intended to curtail windfall benefits for highly paid individuals. In practice, they have had dire consequences for low- and middle-income public employees.
Windfall Elimination Provision
If a state's public schools or public pension employers do not withhold Social Security taxes, and the employee qualifies to collect from the state pension plan upon retirement, the WEP formula will be applied—resulting in lower Social Security benefits than the retiree would otherwise have received. The modifying formula is based on when the individual becomes eligible for retirement and the number of years he or she has worked. (For more on this formula and the calculations, access the Social Security Web site at www.socialsecurity.gov/pubs/10045.html and www.ssa.gov/retire2/anyPiaWepjs04.htm.)
Government Pension Offset
Typically, spouses, widowers, and widows are entitled to Social Security benefits. Under the GPO, if you are eligible for a public pension and have not paid Social Security taxes, your Social Security benefit from your spouse could be significantly reduced. The GPO reduces a person's Social Security spousal or survivor benefit by an amount equal to two-thirds of his/her public pension. This reduction takes effect even if your spouse has paid into Social Security during his or her entire career.
For example, if you qualify to receive a state teacher's pension of $600, and you never paid into Social Security, two-thirds of that amount ($400) would be deducted from your survivor Social Security benefits. Social Security makes reduction calculations regardless of whether your public employee pension is received in monthly or lump sum installments.
Social Security Fairness Act
In response to serious concerns about the fairness of the WEP and GPO acts, and their adverse impact on the retirement welfare of public employees (including many ASHA members), Congress has re-introduced the Social Security Fairness Act (H.R. 82 and S. 206) that would repeal these two laws. The bills were introduced by Reps. Howard Berman (D-Calif.) and Buck McKeon (R-Calif.), and by Sens. Dianne Feinstein (D-Calif.) and Susan Collins (R-Maine).
Unfortunately, previous attempts to pass this legislation since 2001 have been unsuccessful, despite support from the NEA, AFT, and other professional organizations. The legislation currently has 290 bipartisan co-sponsors in the House and 25 bipartisan supporters in the Senate.
ASHA is concerned about the potential impact of the GPO and WEP on ASHA members, and includes the two acts in the "Planning" section of its Governmental and Public Policy 2007 Public Policy Agenda. ASHA is also linking with the NEA in supporting the campaign for passage of the Social Security Fairness Act in the U.S. Congress. The ASHA Schools Finance Committee (SFC) has linking sites on its Web page regarding the GPO and WEP.
What Can You Do?
- Contact your local Social Security office and make an appointment to determine if and how these two laws might affect you.
- Access more information on the Internet (Social Security Administration at www.socialsecurity.gov; the NEA at www.nea.org/index.html; the AFT at www.aft.org).
- Consult with your financial advisor regarding the impact of these laws. (It's possible that you might want to "roll out" your pension into another retirement source, such as a 403, before you retire, so that you will not be subjected to these laws. It will depend on your own situation in your state.)
- Talk with your personnel or human resources administrator at work.
- Support the repeal of the GPO and WEP via the Social Security Fairness Act (H.R. 82 and S. 206). Contact your legislators to express support for repealing this legislation.
- Access the ASHA Schools Finance Committee Web site.
- Write to the ASHA Governmental Relations and Public Policy Board to encourage continued inclusion of these laws on the Public Policy Agenda for 2008.
- Spread the word to your colleagues.
Rhonda Briscoe is an educational audiologist for the Fulton County (Ga.) Schools and a member of the ASHA Schools Finance Committee. Contact her at udrhonda@yahoo.com.
DeAnne Wellman Owre, ASHA vice president for governmental and social policies, is an SLP and chair of the Speech-Language Pathology Department of the Woonsocket (R.I.) school system. Contact her at dowre@aol.com.