Federal employees that retire under the Civil Service Retirement System but also worked some time in the private sector would no longer have their Social Security benefits reduced under legislation introduced Nov. 3 in the House.
The Equal Treatment of Public Servants Act, introduced by Rep. Kevin Brady, R-Texas, and co-sponsored by a bipartisan group of 30 representatives, would reduce the effects of the Windfall Elimination Provision on public servants that didn’t have Social Security taxes taken out of their federal paychecks but did pay into the program under private sector employment.
Standard Social Security payments are calculated based on average monthly earnings adjusted for wage growth, and are weighted to provide low-wage recipients with a larger percentage of their monthly financial needs than high-wage recipients. The first $996 of average monthly earnings is multiplied by 90 percent; earnings between $996 and $6,002 are multiplied by 32 percent; and any remainder by 15 percent.
But under the Windfall Elimination Provision, or WEP, the first tier of earnings can be multiplied by as little as 40 percent, vastly reducing the Social Security paychecks for such workers.
“Many of our public servants have worked extra jobs or an extra career, paying into a Social Security system that treats them differently. We want equal treatment, and believe it’s time for Congress to act,” Brady said in a news release. “Every month the WEP continues, it costs retirees and their dependents in smaller Social Security benefits. I look forward to working with Ways and Means Chairman Richard Neal to get this done as soon as possible.”
Under the new legislation, WEP-affected individuals who are 60 or older would receive a $100 rebate each month; individuals between 22 and 59 would receive either the old WEP calculation or a new one depending on which benefitted them the most; and individuals under 21 would receive a new calculation entirely for their Social Security WEP.
“Since its inception, [the National Active and Retired Federal Employees Association] has opposed the WEP as unfairly punishing hardworking public servants through reduced Social Security benefits. Amid growing support in Congress for its repeal or reform, NARFE urges lawmakers to coalesce around a workable solution to this four-decade drain on those who dedicated their careers to serving the public good,” NARFE President Ken Thomas said in a statement.
The Equal Treatment of Public Servants Act is not the first piece of legislation this Congress use to try to change the WEP. Both Democrats and Republicans have introduced bills that would either similarly recalculate the penalty imposed by the program or do away with it entirely.
“While NARFE’s ultimate goal is for Congress to fully repeal the WEP and the [government pension offset], reform efforts such as the Equal Treatment of Public Servants Act are a good first step toward correcting this discriminatory provision. What’s crucial now is for members of both parties to seek common ground and finally provide relief to WEP-affected retirees,” Thomas said.
Federal employees covered under the Federal Employee Retirement System are not impacted by the WEP, as FERS does deduct Social Security taxes from employee paychecks.
Jessie Bur covers the federal workforce and the changes most likely to impact government employees.