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Witnesses and members of Congress debated issues of fairness at a Wednesday hearing on the impact of the Government Pension Offset and Windfall Elimination Provision on vulnerable workers, including federal employees.

"These rules were intended to help treat workers across employment sectors equitably," said Rep. Michael McNulty, D-N.Y., chairman of the Ways and Means Subcommittee on Social Security. "But many of the approximately 1 million individuals whose benefits are affected by these provisions believe the GPO and WEP are unfair."

Members of Congress indicated that they had a fine balance to preserve.

"To repeal these two provisions of the law would be to give an unfair bonus to those who work in jobs not covered by Social Security," said Rep. Sam Johnson, R-Texas, ranking member of the subcommittee.

David Rust, acting deputy commissioner for disability and income security programs at the Social Security Administration, echoed that concern. He said the GPO, which reduces spousal benefits by two-thirds of the amount that workers not covered by Social Security receive in their own pensions, was a fair recognition that both spouses had helped support each other.

"The GPO provision removed an advantage that some government workers had," Rust said. "A person who worked in a government job that was not covered under Social Security could receive, in addition to a government pension based on his or her own earnings, a full Social Security spouse's or surviving spouse's benefit."

Laura Haltzel, a specialist in social legislation at the Congressional Research Service, said while concerns about fairness might be justified, GPO might not be the most accurate way to allocate benefits fairly.

"Many agree that reducing everyone's spousal benefit by two-thirds of their government pension is an imprecise way to estimate what the spousal benefit would be had the government job been covered by Social Security," she said. "This procedure has uneven results, and some believe it is especially disadvantageous for surviving spouses and low-paid workers."

Representatives of federal employee associations argued in written submissions to the committee that GPO and WEP presented serious issues of fairness to government employees, especially women.

Rhonda Trent, president of the advocacy group Federally Employed Women, said both provisions had a disproportionate impact on female federal retirees who earned less than their male counterparts and relied more heavily on retirement benefits for their financial security. In addition, he argued, it was unfair to penalize people who worked for the government.

"The victims of GPO are largely elderly women who are both [Civil Service Retirement System] annuitants and widows of private sector employees," Trent wrote in testimony to the subcommittee. "Many of these women worked in lower grade/salaried positions and the loss of the Social Security benefit causes a major financial hardship. Had these women spent their careers anywhere but the federal government, they would be entitled to full, unreduced Social Security spousal or survivor benefits."

Trent cited Social Security data that found that the average offset was $138 more a month for women than for men. Margaret Baptiste, president of the National Active and Retired Federal Employees' Association, noted that the GPO affects 401,200 Social Security beneficiaries, 75 percent of whom are women and about 42 percent of whom have lost their spouses.

Rust said some provisions of the calculations were intended to help women, including those that gave low earners a higher proportion of their pre-retirement incomes, and that Congress had raised the level of payments to widows and widowers over time.

"NARFE is pleased that Congressmen McNulty and Johnson are using their positions on the Social Security subcommittee to investigate unjust Social Security policies that undermine the earned retirement benefits of more than a million public servants," Baptiste said.

But, she added, the organization was looking for action in addition to investigations.

"Federal retirees expect this Congress to finally overturn these laws, which are denying many of our nation's public servants an adequate retirement," Baptiste said.

COMMENTS

• I am not for paying anyone anything they have not earned (except in dire circumstances – reference the concept of “noblesse oblige”); but if you paid for a benefit, you should receive that benefit. Yes I must note that, as seen in several of Tammy’s articles, given the same last 3 years’ income, 30 years of service; the basic FERS retirement equates to 40-45% of a CSRS retirement. But, my spouse (CSRS), like many others, paid into SS prior to her current employment, will as likely after retirement, and should receive what she earned. I (FERS) also paid for survivor benefits (40 years of military & civilian careers upon retirement) for her; and she should be entitled to that as well. Even putting these two together, they will only be minuscule and she will be existing on near-poverty level income after I’m gone; after supporting our people and government during a 30 year career. In an effort to ensure she has sufficient funds to live without the largess of others, I’m chunking every cent I can into the TSP; which I might add reduces my own Social Security entitlement by lowering my taxable income. But what am I to do? Well, the TSP board thinks very few civil servant would take advantage of a TSP Roth plan, but it is just such a plan that would allow government employees, such as myself, to put away a little retirement change without lowering our income basis for later SS payments. I keep wondering if there are any competent CPAs within the beltway, and then I remember how they get us both coming AND going. Tip off Posted February 4, 2008 12:29 PM
• Social Security is well on its way down the path to becoming a vehicle for income redistribution that masquerades as pension and insurance system. Paul M. Posted January 24, 2008 3:26 PM
• The WEP and the GPO were passed by Congress just because they could take from the Gov. employees. Rep McKoen (CA) introduced HR 147 in 2005 which would repeal the GPO and WEP. It had 302 cosponsors but has not been acted upon. If repealed it would restore proper retirement to thousands. Contact your congressman and get it going. Ken Ross Posted January 24, 2008 12:34 PM