Speak out now about this travesty!
“To save money” in the 1980’s, Congress added the unfair WEP formula that cuts public workers’ own earned benefits. They also devised the GPO to deprive (mostly) wives of fair earnings from their marriages. The RESULT? Less than a 2% savings of Social Security’s annual Old Age expenditures, and misery for millions!!!
Here’s the story with some new twists:
In 1983 Congress began a process of “strengthening” Social Security by cutting benefits. Starting retirement later reduced overall benefits for future retirees—they had to retire at 67 instead of 65 for full benefits. In addition, it was decided to eliminate what was considered double-dipping. This is when benefits were cut for those public employees who also had pensions from systems not paying into Social Security. However, these same people or their spouses had paid into both systems and therefore should receive their full benefits resulting from the Social Security taxes they did pay.
The Windfall Elimination Provision: Penalty for working 2 jobs.
It is important to understand how the standard Social Security benefit is calculated. Your benefit is an amount based on a calculation using your contributions over your working years and the number of years you have contributed. You get back 90% of the first $856 of the average earnings formula, 32% of the next cutoff amount, and 15% of the next higher amount. This balance reimburses low-income earners at a higher percentage of their PIA than of higher earners. Sounds fair. The WEP reverses that thinking by giving ALL those affected by the WEP only 40% rather than 90% of the first $856 of the amount and then reimbursing the rest of the PIA at the same rate as regular earners. That means that the lower-income earners affected by the WEP lose a higher percentage of their contributions than the higher earners. This is a brutally unfair and thoughtless process.
The Government Pension Offset: Losing your share of marriage benefits. The GPO deprives spouses, mostly women, of the ability to take advantage of the 50% increase in benefits earned by a couple with a non-Social Security-earning spouse. The general contribution rate was calculated to include spousal benefits. The GPO was based on the notion that if you had a government pension from an agency that didn’t participate in Social Security, that pension should make you ineligible for the spousal or survivor benefits for which your spouse had already paid. There is no Social Security correlation between the number of years you were a dependent spouse and how many years you paid into your pension.
As dependent spouses have gained more education and positions that pay more, a few years of professional work can eliminate ALL benefits for as many as twenty years of dependency on the spouse. This is often because they pay a higher premium into their professional pension than they would have into Social Security. The more they pay, the more Social Security they lose. The GPO is designed to eliminate up to 40% of one’s retirement income (pension + SS). Incredibly, in addition, as retirees get cost-of-living increases in their pension, they are required to report this amount to the Social Security Administration who will reduce their Social Security benefits $2 for every $3 of the pension’s cost-of-living increase. Often husbands die before their wives, expecting that the Social Security benefits they have paid for over a lifetime of work will help take care of their loved ones. Too often that does not happen. In fact, many widows lose all of their earned Social Security benefits, ruining the opportunity for a secure retirement.