Unfair rules reduce educators’ retirement income
ACSA members have a chance to overturn the WEP, GPO
May 24, 2021
After her husband George passed away, retired school administrator Rosemary Ingram received an official letter from the Social Security Administration. It informed her of the monthly survivor benefit she would receive as a result of her husband’s decades of work: $2,000.
But the next paragraph came as a bit of a shock.
“It said, ‘However, since you are receiving a government pension, you will be getting $0,’” Ingram recalled. “They not only had to tell me how much I was not getting, they had to tell me I was getting zero.”
Stories like Ingram’s are common among educators due to the Windfall Elimination Provision and the Government Pension Offset — two federal laws that are unfairly reducing retirement benefits for public servants and their spouses. Now, as Congress is set to take up legislation to overturn these rules, the ACSA Retirement Committee is asking for help in protecting the retirement incomes of former, current and future educators.
“Our State Retirement Committee strongly supports the full repeal of the two Social Security penalties: WEP and GPO,” said Kathleen McCreery, chair of the ACSA Retirement Committee. “These Social Security benefit reductions have had a significant negative impact on the ability to recruit and retain teachers that are entering the profession as a second career and they negatively impact all educators for choosing a career of public service.”
ACTION NEEDED: What you can do to help overturn the WEP/GPO
Educate yourself:
Read ACSA’s background information on the Resource Hub, https://content.acsa.org/acsa-content/acsa-wep-gpo-background.
Sign the petition:
Help reach 75,000 signatures on a petition that will be sent to the U.S. House of Representatives and the U.S. Senate. Visit https://sign.moveon.org/petitions/elimination-of-the-unfair.
Submit a testimonial:
Tell ACSA’s Retirement Committee how you have been impacted by filling out the online form at bit.ly/ACSATestimonialWEP-GPO. Please provide testimonials by June 1, 2021.
Write your representatives:
Contact California Senators Feinstein and Padilla and your U.S. Representative to tell them that you want the WEP and GPO laws overturned.
Government Pension Offset
The Government Pension Offset rule reduces and sometimes eliminates Social Security benefits to spouses, widows and widowers who also receive money from a government pension (e.g., CalSTRS). It was passed in 1977 to stop highly-paid federal civil servants from double-dipping into Social Security and other pensions. In 2017, nearly 683,000 people (98,937 Californians) were affected by the GPO.
Under this rule, Social Security benefits are reduced by an amount equal to two-thirds of a spouse or survivor’s pension benefit. If two-thirds exceeds the amount of a person’s spousal benefit from Social Security, then he or she will not receive a Social Security check.
“The GPO is one of the primary factors that can place a retired educator in poverty status after the death of their spouse,” McCreery said. “It disproportionately harms female educators who stand to lose their full SS survivor benefit when their spouse dies.”
When Ingram, who retired as a Human Resources Coordinator with the Fairfield-Suisun USD, discovered she would not receive any of her deceased husband’s Social Security benefit due to the GPO, she had to change her financial plan.
“I felt that number one, I would have to budget differently,” she said. “I’m comfortable and grateful for my profession, but when you think you’re going to have a certain amount that you can do things with and you are a surviving spouse, it can impact you with your financial security.”
She also felt angry that the money her husband was putting into Social Security for all those years — 27 in the Air Force and 16 with ExxonMobil — provided her with no income protection.
“There was a bit of righteous anger at the injustice,” she said. “These are benefits he earned.”
Windfall Elimination Gap
The other rule that affects retired educators is the Windfall Elimination Gap. It works like this: If you had two jobs over the course of your career — one in which you paid Social Security taxes, and therefore earned your own social security credits, and a public sector job where you did not pay Social Security taxes (referred to as “non-covered” public employment) — you are penalized by WEP and may lose up to 60 percent of your earned Social Security retirement benefits.
“This is our opportunity to unite and repeal these two penalties making a difference for both current retirees and our future retirees. Your help is needed!”
— Kathleen McCreery, Chair, ACSA Retirement Committee
In 2018, nearly 1.9 million people (259,059 Californians) were affected by the WEP. Many teachers are affected by it because of part-time jobs they had during their high school or college years or by working in private employment during the summer months after they became teachers.
Unfortunately, this rule also exacerbates the teacher shortage by reducing the ability to recruit private industry workers to be “second career” teachers. These professionals from other sectors, like science, technology and math, could bring their skills, knowledge and passion into California’s classrooms. However, they are dissuaded from doing so because they would have to forfeit a portion of the Social Security benefits they earned and paid for. In addition, teachers in other states that do not follow the WEP rule would be discouraged from teaching in California.
“Many of our educators have worked previously in positions covered by Social Security and have entered education to serve in hard-to-staff positions,” McCreery said. “The WEP penalizes these educators.”
The WEP rule also disproportionally impacts low-income workers. Such jobs result in modest Social Security benefits, but these workers will be subject to the same WEP reduction as workers who receive much higher Social Security benefits. The reverse is also true. Workers who receive relatively modest public pensions see their Social Security benefits reduced under the WEP at the same rate as workers with more substantial benefits.
Women are disproportionately impacted by the WEP and GPO in California. Approximately 72 percent of educators in California are women, who receive fewer years of service than their male colleagues due to their disproportionate role as primary caretakers of children and seniors in their family.
Advocacy efforts
The State ACSA Retirement Committee continues to advocate on the state and federal levels to support members by overturning these laws.
Two current pieces of federal legislation would do just that. The Social Security Fairness Act (HR 82), sponsored by Rep. Rodney Davis, has been joined by a Senate version, SB 1302, sponsored by Sen. Sherrod Brown.
As representatives on the Association of Retired Americans National Task Force for Repealing WEP/GPO, Shelton Yip and Cheryl Lynn de Werff together with ACSA State Retirement Committee Chair McCreery have been working with a group of ARA state leaders and individuals from other organizations on this issue. ARA National has sent a letter from the task force to the Women’s Caucus and to the White House to support the repeal of the WEP/GPO.
The Retirement Committee is asking all ACSA members to join advocacy efforts and send a message to California’s representatives in Congress that they must eliminate the WEP and GPO.
“This is our opportunity to unite and repeal these two penalties making a difference for both current retirees and our future retirees,” McCreery said. “Your help is needed!”
Alice Petrossian, retirement committee liason added, “This is not a retiree issue. If not corrected it will affect every educator who will retire in the next 50 years or more. Get active — do this for yourself and those who will follow.”