In 2003, I chaired a Senate Governmental Affairs Committee oversight hearing to examine a problem faced by many of our nation’s dedicated public servants, such as teachers, police officers, and firefighters, when they retire. During that hearing, we heard compelling testimony from Julia Worcester of Columbia, Maine – who was then 73-years old. Mrs. Worcester worked for more than 20 years as a waitress and in factory jobs before deciding, at the age of 49, to go back to school to pursue her life-long dream of becoming a teacher. She began teaching at the age of 52 and taught full-time for 15 years before retiring at the age of 68. Since she was only in the Maine State Retirement System for 15 years, Mrs. Worcester does not receive a full State pension. Yet she was still subject to an unfair reduction of her Social Security. Unfortunately, this problem still exists today. And, as a result, Mrs. Worcester is still substitute teaching, at age 77, just to make ends meet.
|Senator Susan Collins represents the State of Maine in the United States Senate.|
This unfair treatment results from two provisions of the Social Security Act – the windfall elimination provision (WEP) and the government pension offset (GPO). Both affect workers who are eligible for federal, state or local pensions from work not covered by Social Security, but who also qualify for Social Security benefits based on their own other work or that of their spouses. The two provisions often penalize people for holding jobs in public service when the time comes for them to retire.
I am working to eliminate these penalties. Earlier this year, I joined Senator Dianne Feinstein (D-California) in introducing the Social Security Fairness Act that would repeal these two provisions. This legislation has strong bipartisan support. Senator Feinstein and I also recently joined together to urge the Senate Finance Committee, which has jurisdiction, to move our bill forward.
These public servants – or their spouses – have all paid taxes into the Social Security system. So have their employers. Yet, because of these two provisions, they are unable to collect all of the Social Security benefits that they have earned. While the GPO and WEP affect public employees and retirees in virtually every state, their impact is most acute in 15 states, including Maine, where most state and local employees are not covered by Social Security. Nationwide, more than one-third of teachers and education employees, and more than one-fifth of other public employees, are affected.
WEP reduces Social Security benefits for retirees who paid into Social Security from one job and who also receive a government pension, such as from the Maine State Retirement Fund, from another. This reduction can impose a harsh penalty of more than $300 per month. The GPO reduces the Social Security survivor benefit by two-thirds of the amount of his or her public pension. It is estimated that nine out of ten public employees affected by the GPO lose their entire spousal benefit, even though their deceased spouses paid Social Security taxes for many years.
Almost one million retired government workers across the country have already been harmed by these provisions. Many more stand to be harmed in the future. Moreover, at a time when we should be doing all that we can to attract qualified people to public service, this reduction in retirement benefits makes it even more difficult for our federal, state and local governments to recruit and retain the public servants who are so critical to the safety and well-being of our families.
What is most troubling is that this offset is most harsh for those who can least afford the loss – lower-income women. In fact, of those affected by the GPO, 73 percent are women. The GPO reduces benefits for more than 300,000 of these individuals by more than $3,600 a year – an amount that can make the difference between a comfortable retirement and poverty.
Many Maine teachers, in particular, have talked with me about this issue. They love their jobs and the children they teach, but they worry about the future and about their financial security in retirement. They also recognize that these unfair provisions exacerbate the national teacher shortage that is growing to crisis proportions.
This simply is not fair. After lifetimes of hard work, individuals such as Julia Worcester, who have dedicated themselves to teaching and other public service should not have to worry about retirement. My legislation will help ensure that this dedication is fairly rewarded, not unfairly penalized.