Pension Offset Bill Unveiled

Calling a law that reduces Social Security spousal benefits for 234,000 retired federal workers "harsh and heartless," Sen. Barbara A. Mikulski, D-Md., Tuesday introduced a bill that would allow retired public employees to pocket more of their pensions and Social Security benefits.

Under current law, when a government retiree, who was not covered by Social Security, is eligible for a Social Security spousal benefit, that benefit is reduced by two-thirds of the survivor's government pension. For example, if a woman has a government pension of $600 per month from the Civil Service Retirement System and is eligible for a Social Security widow's benefit of $800, her widow's benefit would be reduced by $400 (two-thirds of the $600). This gives her $1,000 per month instead of $1,400.

Mikulski's legislation would not require a two-thirds offset unless the combined amount of the pension plus the Social Security spousal benefit exceeds $1,200. If this change is applied to the example above, the widow's benefit would be reduced by two-thirds of $200 (the amount over $1,200), which would be $133. Mikulski's bill would give this woman a total monthly income of $1,267.

The Coalition to Assure Retirement Equity (CARE) estimates that 54 percent of those affected by the current offset rules are women, because women tend to have the lowest pensions and also the longest life expectancy.

"Just because they worked for the government, and usually for less money than men, they are penalized at retirement for having been a government worker," said Charles Jackson, president of the National Association of Retired Federal Employees.

Mikulski said that the offset, which became law in 1982, has caused retirees to worry about economic security.

"Couples who worked and counted on Social Security benefits for a surviving spouse find that those benefits aren't there for the survivor," Mikulski said. "This existing rule hurts seniors who should be enjoying their retirements after a lifetime of work."

Mikulski said that she would prefer repealing the entire offset, but cannot because it would cost the government almost $4 billion over five years.

Mikulski's proposed bill will serve as a companion bill to H.R. 2273, introduced by Rep. William Jefferson, D-La., which places other limits on reductions in benefits for spouses and surviving spouses receiving government pensions. H.R. 2273 was referred to the House Ways and Means Committee in July.