Teachers who get pensions not able to get Social Security

Being a Teacher Cost This Retiree $111,384 | NEA

There is something about the Social Security system that many teachers are complaining about as unfair.

Under the law, a teacher who receives a state pension might not be able to get Social Security.
They can get one or the other, not both.

Some might view this as fair, designed to prevent individuals from unfairly getting a double retirement pension from the government.

But some view it as unfair, because many of these teachers worked other jobs at various points in their life and paid Social Security taxes.

Part-time teachers who are eligible to collect smaller pensions will also be penalized.

Social Security benefits will be reduced by two-thirds of the amount of government pension the individual is receiving. For example, if an individual gets a monthly civil service pension of $3,000, then their Social Security benefit will be reduced by $2,000. That will mean the individual will only be able to receive the equivalent benefit of a one third of their pension amount.

This reduction also applies to spousal benefits. (Normally, a person can get 50% of their spouse's Social Security benefits instead of their own calculated benefit, if that would be a higher amount, after their spouse dies)

The original idea behind this was that the people collecting government pensions spent most of their career only working in that government job, during which time they did not pay Social Security taxes. In 15 states, teachers and other public employees like police officers, postal workers, and firefighters pay into their state pension systems, but do not pay into Social Security.

Many retired educators in California are finding retirement far less comfortable than they had assumed. By law, retired educators aren't allowed to collect Social Security benefits, though many have paid into the system.

"I loved the children I taught. But I've been penalized for that decision by the government," said Lee Giammona, who spent 25 years teaching elementary school children in Santa Rosa.
For her, it was a second career.

But as much as she loved teaching, she now questions whether she should have left her 10-year career in business for the classroom.

"If I had known that when I went back into teaching, I think I would have reconsidered that decision for sure," she said.

When Giammona retired as a teacher in California, she didn't know she would only be allowed to collect a small portion of the Social Security benefits she paid into before stepping into education.

Under the Windfall Elimination Provision, she gets only $42 a month from Social Security.

"They can just keep it. It's embarrassing. It's like a slap in the face," she said.

Giammona does receive her teacher's pension. But she didn't teach long enough to max out her retirement. And now she says she struggles.

"It's very hard to live on a limited amount of money," she said.

Giammona also received another unwelcome surprise.
When her husband died last year, she was not allowed to collect any of his Social Security benefits.

"I get nothing. Nothing. Zero. And wow I get penalized again for being a teacher," she said.

Almost two million retired teachers and public employees who once worked other jobs to supplement their lower pay, find out later in life that they will collect little to none of their Social Security.

"Once people realize this is what is going to happen, fewer people are going to go into teaching. We already have a severe teaching shortage."​

Retired teachers in California struggle to make ends meet with no access to Social Security, by Rob Roth, FOX KTVU, September 22, 2021

 

A proposal for a fairer way to change the rule would be to take 30 years, then subtract the number of full time years (or equivalent) that person was a teacher. So let's say they were a teacher for 12 years, then that would leave 18 years.
Then they would look at the solid consecutive 18 year span of time that they were paying the most Social Security taxes, and their Social Security payment would be based off that. (The normal rule involves looking at the solid consecutive 30 year span of time they paid the most Social Security taxes)

So this person might end up getting about half the amount of Social Security payment a normal person would get, but that would still be better than what they get under the current rule.

I think that would be more mathematically consistent with how social security payments are calculated for everyone else.

Or maybe they could use actuarial calculations to decide the value of a retired teacher's pension if it were converted backwards in time into the equivalent of a salary with no pension, but treating part of that pension as a social security payment. Then once it was converted into the "equivalent" of a normal salary that was subject to social security tax, they could run those numbers into the normal calculation.

 

There has already been a reform to this:

House Passes $196 Billion Social Security Bill: Will Repealing Pension Reductions Shorten The Program's Lifespan?

On Nov. 12, the U.S. House of Representatives passed the Social Security Fairness Act, a bipartisan bill set in motion to eliminate two long-standing provisions that currently reduce Social Security benefits for public sector employees.

The legislation was first introduced in 2023 and will now head to the Senate, where it has strong bipartisan support. If passed, it is estimated to cost $196 billion over the next decade. Critics worry that enacting this bill could further exacerbate Social Security's funding challenges.

The bill addresses two key provisions – added to the Social Security Act in 1983 – that affect public sector workers:

1. The Windfall Elimination Provision (WEP): This rule reduces Social Security benefits for individuals who receive pensions from jobs where they didn't pay Social Security taxes, like certain state and local government positions. According to the Congressional Research Service, about 2.1 million people are affected by this provision.
   
2. The Government Pension Offset (GPO): The GPO reduces Social Security benefits for spouses, widows and widowers who receive government pensions. About 745,000 individuals currently receive reduced benefits under this provision.
   

 

Update on the Social Security Fairness Act:

Schumer says Senate will vote on Social Security changes

Senate Majority Leader Chuck Schumer (D-N.Y.) said Wednesday he’s “doing everything” he can to try to pass legislation that would enact some Social Security reforms before Congress ushers in a new class next month.

Schumer said at a rally the Senate “is going to take action on the Social Security,” telling union members, “you’re going to find out which senators are with you and which are [against] you.”


The problem of course, is that it isn't funded, which means Social Security will start running out of money to make full benefits even earlier.

 

I wonder what kind of things will happen when the US does run out of money?

 

all we have to do is raise the cap, 90% of Americans pay the ss tax for every dollar they earn, anyone earning over 160k stops paying for any dollars over that - we should have done this 10 or 20 years ago

 

We ran out of money a long time ago. The real question is what happens when the world stops taking our credit card.

 

I've already explained this to you so many times I will just assume you're uneducable.

 

you just don't get it, or don't want too

 

I literally just said that about you, so we're even.

 

And now, with the Social Security bill coming for a vote the republicans are promising a fight.
Now, I don't have a dog in this fight, since I never served in government except for a stint as a cop, and that pension was lost years ago because of the laws then in place. But it seems to me, at a time when we're $36 TRILLION in debt and it's growing faster than a teenager, adding costs is not a good course to take.

GOP battle erupts over Social Security bill

GOP battle erupts over Social Security bill
Story by Alexander Bolton
• 7h

Republican senators battled behind closed doors Tuesday over a proposal to beef up Social Security benefits for people who are eligible for non-Social Security government pensions.

The legislation, which has passed the House, is expected to reach the Senate floor Wednesday, but some Republicans who are worried about its price tag are hoping to stop it dead.

One GOP senator who attended Tuesday’s meeting described it as “an intense discussion.”

“I think most of our members were alarmed that something so big” would come straight to the Senate floor, the senator said, noting the legislation had not been marked up by the Senate Finance Committee.

A group of Senate conservatives led by Sen. Rand Paul (R-Ky.) are demanding Social Security reforms, such as gradually raising the retirement age, to offset the cost of repealing two policies that reduce Social Security benefits for public-sector workers.

Paul says the bill, which has 13 Senate Republican co-sponsors, would lead Social Security to become insolvent more quickly.

“It speeds the bankruptcy of Social Security. Social Security is due to go bankrupt in 2034. This will speed it up by a year or so. It’s $200 billion added to a program that is already short of money,” he told The Hill.

He wants senators to vote on an amendment to offset the bill’s impact on the Social Security trust fund by gradually raising the retirement age to 70.

“If you’re going to add to its mandate by expanding it, you should pay for it,” he said. “One of the proposals that’s been out there for a long time is to gradually raise the age of eligibility.

“I’ll propose that as an amendment. … If we raise the age [of retirement] gradually, about three months a year for the next 12 years, the age will go to 70 and then be linked to longevity. That would pay for this expansion,” Paul said.

“I won’t vote to support expanding [Social Security benefits] without paying for it,” he said.

“There are several other people opposed to this bill, too. So it may be that the others simply just want to delay it as long as possible in hopes that they will not be able to complete it this week,” he said.

The bipartisan bill, the Social Security Fairness Act, passed the House earlier this month by 327-75 vote.

Paul’s demand to vote on an amendment to the bill to raise the Social Security retirement age puts Republican senators in a tough spot; many of them won’t want to touch the issue.

President-elect Trump told NBC’s “Meet the Press” in a recent interview he’s “not touching” Social Security other than to make it more efficient, opposing raising the age to receive benefits.

“The people are going to get what they’re getting,” he said.

Paul has leverage because he can drag out the floor debate on the bill for days if he doesn’t get a vote on his amendment. That would in turn delay the Senate’s consideration of a stopgap funding bill that needs to pass by the end of the day Friday to avoid a government shutdown.

Senate Republican Whip John Thune (S.D.) said the issue was debated intensely at the weekly Tuesday Republican policy lunch.

“There was a lot of conversation around [it] today,” Thune said, referring to proposals to raise the retirement age or find other ways to soften the impact on Social Security’s finances.

He described the debate at the Senate lunch as a “fulsome conversation.”

But the split in the GOP conference is so pronounced that Thune isn’t taking sides, instead letting his colleagues vote their conscience.

“I think in the end, it’s going to come down to individual members are going to make their own decisions,” he said.

“Obviously, I’m concerned about the long-term solvency of Social Security, and that’s an issue that I think we need to address,” he added.

The legislation, sponsored by Sens. Sherrod Brown (D-Ohio) and Susan Collins (R-Maine), would repeal the Windfall Elimination Provision, which was enacted in 1983, and the Government Pension Offset, enacted in 1977, to allow public-sector workers to receive their full Social Security benefits.

The Windfall Elimination Provision, or WEP, reduces the Social Security benefits of workers who receive pensions from a federal, state or local government for employment not covered by Social Security.

The Government Pension Offset reduces Social Security spousal benefits for the spouses, widows and widowers whose spouses receive government pensions.

Sen. Mike Lee (R-Utah), a prominent conservative, expressed alarm at the prospect of further draining the Social Security trust fund for a short-term political payoff.

“It’s got to be offset one way or another. We have never in history, to my knowledge, unleashed such a massive bomb that would blow such a massive hole in the Social Security trust fund — $200 billion,” he said.

“I understand the need to address some inequities that have arisen in this area. I don’t think there’s any member of our conference who doesn’t think that we need to do some repair, but I think we’re kidding ourselves and mistreating the American people if we blow a $200 billion hole in it and give no thought as how to fix that,” Lee said.

The Congressional Budget Office projected in September the bill would add $196 billion to the deficit over the next decade.

Sen. Ron Johnson (R-Wis.) told The Hill that conservatives are pushing hard to sink the bill.

“Hopefully it gets defeated,” he said.

“I think a lot of people who co-sponsored it … [did so] because there are people in their state who are impacted by it. Their assumption always was that it was going to be paid for,” he said.

“It’s way too broad. It provides benefits to people who aren’t harmed by the fix from the 1970s,” he said, referring to the Government Pension Act.

“I would view it as grotesquely irresponsible,” he said.

Johnson said Sen. Mike Crapo (Idaho), the top-ranking Republican on the Senate Finance Committee, has complained that the bill did not even go through his committee, which has jurisdiction over Social Security.

The Republican co-sponsors include Sens. Mike Braun (Ind.), Deb Fischer (Neb.), Pete Ricketts (Neb.), Marsha Blackburn (Tenn.), Lisa Murkowski (Alaska), Markwayne Mullin (Okla.), John Boozman (Ark.), Rick Scott (Fla.), Jerry Moran (Kan.) and John Kennedy (La.) and Vice President-elect JD Vance.