If there were two laws, one which took a $480 bite out of your monthly Social Security benefit, and another that ate up 100% of an individual’s widow(er)’s benefit from Social Security, what would you call them?
I call them the Evil Twins because that’s the way many if not most feds and retirees see them.
Congress, which enacted them, is more diplomatic. It calls them WEP (Windfall Elimination Provision) and GPO (Government Pension Offset). Whatever you call them millions of federal and public employees hate them, and are hit by them every month, losing millions and millions of dollars in benefits they or a spouse thought they were paying for while employed by Uncle Sam — under the old Civil Service Retirement System. Why? Well, Congress thought it was a good idea at the time. Now after decades of experience, many current and future retirees dread its impact.
The idea was to prevent federal CSRS retirees, whose work was not covered by Social Security, from collecting higher Social Security benefits based on as little as 40 quarters working, often at very low paying jobs in the private sector. At the time Congress pointed to the so-called “welfare tilt” of Social Security, which gives short-term or low-wage workers a relatively larger benefit. At the same time, Congress said it applied to survivors of federal and state employees entitled to a spousal Social Security survivor benefit.
WEP alone is estimated to impact 1.9 million seniors reducing their monthly Social Security benefits by as much as $480. For many that is a huge financial hit. GPO is even more complicated but the bottom line is that it can eliminate the Social Security widow(er)’s benefit. That’s a huge financial loss for most of those impacted who are in their 70s, 80s and 90s.
Proposals to eliminate WEP and GPO have been around almost since enactment in the 1980s. But repeal has always been the legislative equivalent of mission impossible — probably still is. But what about “reform” rather than repeal? Has the turmoil created by the COVID-19 pandemic changed the political outlook? In the House, 245 members have signed onto a bill that would repeal the Evil Twins.
Not likely to happen, but under House rules if that repeal proposal gets 290 cosponsors — 45 more — it has to come up for a vote. And that opens up the possibility of a modification, though not repeal of the two. Long shot, yes, but possible.
In the meantime, back to retirement plans for — someday.
My guests today on our Your Turn radio show are benefits expert Tammy Flanagan. She’ll talk about what you should be thinking regardless of your age or time in government so that when you want to/have to leave, you will have enough money to live on. Lots of boxes to check. She’ll explain what they are and why you should have a backup plan. Listen at www.federalnewsnetwork.com or 1500 AM in the Washington, D.C., metro area.
Later during the show we’ll be joined by Jessica Klement of the National Active and Retired Federal Employees association. NARFE has been one of the leading advocates of repeal/reform of GPO and WEP. She’ll explain what they do and give an update on what Congress might do.
Also on Thursday, Tammy and Jessica will be doing a webinar on the Evil Twins, the details for which can be found here.
Until then, if you have questions for us, send them to me before the 10 a.m. EDT showtime at firstname.lastname@example.org Episodes will be archived here on our show page so you can listen again, listen later or refer it to a friend or coworker. Stay safe!