POWERPOINT MANUSCRIPT/NOTES
GPO/WEP, WHAT CAN ONE PERSON DO?
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No script.
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This presentation was prepared for two purposes: ONE, to explain the Governmental Pension Offset (GPO) & Windfall Elimination Provision (WEP) and TWO, to explain what we can do to repeal the GPO/WEP. Although this presentation was not prepared by financial planners, we GUARANTEE this information will significantly affect how you plan for your long term financial future.
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These numbers are an estimate because real numbers are NOT known as there are no central records of how many people receive public pensions. Since education is one of the biggest areas to take a HIT overall, the GPO & the WEP are sure to have a heavy influence on the profession as a whole. One third of Americas’ educators work in states where they risk significant loss of income due to these arbitrary and unjust laws. A surprising and undeniable fact.
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As you can see the WEP or Windfall Elimination Provision reduces one’s expected Social Security income unless he/she has paid Social Security taxes for 30 years on “substantial income”.
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The purpose of the WEP is to remove the supposed advantage that these workers would otherwise receive because of the Social Security benefit formula that favors workers with smaller amounts of Social Security covered career earning. In reality this law is imprecise and often unfair.
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In 1977 the Supreme Court ruled that’/?? it was unconstitutional to ask men to prove they had been dependent on their wives in order to receive Social Security based on the wife’s higher earnings. To limit these benefits men were then entitled to from their wife, the GPO was created to offset the benefits to survivors. The intent of the GPO was supposed to limit benefits in the same way that Social Security benefits can not be received twice, due to the dual entitlement rule which disallows this. However, the GPO instead disallowed ANY Social Security benefit in many circumstances. As a result, Social Security benefits for public employees affected by the GPO are calculated with a formula which differs from that used for benefits of other people receiving Social Security benefits. THIS DIFFERING RATIO IS INEQUITABLE.
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The Social Security statements that we receive do not clearly represent the amount of benefit to be received. The benefit amount listed is the benefit we receive if we do not also fall under the GPO and the WEP. Beginning January 1, 2005 state and local government employers who offer public pension plans have an obligation to notify newly hired employees of the potential reduction of future Social Security benefits. However, those who were hired prior to this date have generally not been told and large numbers of them do not know of the existence of the GPO/WEP. They are therefore, hit by an UNEXPECTED SURPRISE when they retire. This of course, is too late to compensate for this reduction in retirement income.
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The professions penalized cover a wide range of occupations. Public service is essential to a thriving culture
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The GPO & the WEP affect those whose pensions do not pay into Social Security. One of the groups of employees affected is federal employees. They are numerous and spread all over the U.S. and overseas as well.
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Some state, county and municipal employees are also affected in 26 states. These states include those colored blue. There are 6 states, with the largest number affected in California.
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Teachers are penalized in 15 states, which it is easy to see include some that are highly populated. Therefore the population figures of these states in comparison to the total US population are much greater than might first appear.
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The GPO & the WEP were originally formulated to maintain a fair Social Security system in the face of a changing society. When in fact, what they accomplished is to insert UNFAIRNESS into the Social Security system. Unfairness which has been allowed to continue even though it long ago become evident that the intent of the law and the reality of the law were not in accord. Public employees are NOT DOUBLE DIPPING as they paid what was required by 2 different and separate systems..
RI, TX.
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In her address to Congress 2/5/2009, Diane Feinstein said that we will need 1.7 -2.7 million new teachers nationwide by the end of this year because of record enrollments. These numbers may be hard to fill with the recruitment stifled.
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This monthly loss is based on estimated SS earnings of less than $1,000 a month, so this is a minimum as many people lose much more. Some losses are as much as $2,000 plus/month.
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We as a nation have worked long and hard to rid ourselves of DISCRIMINATION based upon a variety of factors. Women long ago got the right to vote, but once again are victimized. This can no longer remain a secret, but must become GENERAL PUBLIC KNOWLEDGE.
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The general public is not aware of the existence of the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP). Some say that public workers are DOUBLE DIPPING. This is not so, since they paid what was required by 2 different and separate systems. They are NOT asking to be paid twice from the same system.
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This is outrageous that we treat our military personnel like this. They put their lives on the line for us and then we turn our backs on them.
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How can we continue to ignore those that serve us?
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For most people, Social Security pays the spouse the deceased person's Social Security benefits. However, upon the death of their spouse many public employees lose all or most of their survivor benefits. Some, because they cannot make it on their pension alone, must go on welfare. Others must visit food banks. The GPO & the WEP can make the difference between poverty & self sufficiency. This Texas teacher wrote “ This government is crazy...they take away your hard earned earnings and then force you into entitlement programs.”
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Another victim of WEP says “My housing expenses alone, including dues & utility, exhaust fully 90% of the pension. I entrusted a bank (Government) with my hard earned money for half my life and now they're hitting me with an undisclosed 40% service fee upon withdrawal.”
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The GPO & the WEP have caused many serious financial struggles. Is this what the government wanted when they were trying to ensure the financial solvency of the Social Security system in a “fair” way? The end does not justify the means and this poverty forced on our hard working citizens is a disgrace to our country.
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Another widow of 73 is still teaching part time to make ends meet.
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This story is evidence that it is very important to know about the GPO as part of a divorce settlement.
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Those who do not understand the GPO & the WEP sometimes think that the public employees do not have just cause to push for change. What other company or bank would be allowed to take your money on the ruse of providing for your retirement and then chose not to credit you what you had earned, while at the same time others were credited with what they had earned? Social Security taxes are paid by both the employee and the employer. The employee pays 6.2 of their income and the employer pays 6.2%, a total of 12.4%. If self employed, then you yourself must pay the entire 12.4 %. How much money do you think you or your spouse has paid into Social Security over a lifetime? Check your annual Social Security statement.
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We in the United States take pride in our country where there is purported to be equal opportunity for all. However that is not the case, when Social Security is considered.
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Many members of Congress seem to be supportive of repeal, but when it comes down to it will we have their vote? We can not assume that if this bill were to be voted on, it would be easy to garner the 218 votes needed to get the bill out of the Ways and Means Committee or the 50 needed to leave the Senate Finance Committee.
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Of course repeal will cost money and that is the principal argument preventing change. But, in looking at the overall expenditures for Social Security benefits, honoring the ethical treatment of public servants is but a small portion of the cost of total benefits. The real question is not can Social Security afford to pay us our earned increased benefits. The real question is “Should our nation deny rights to some and grant them to others?”
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The need for serious financial planning is usually clear long before retirement. In order to make useful decisions, it is imperative to understand the various resources available to us. If we count on something which later disappears, it can have catastrophic results.
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It has been predicted that 40 or possibly even 50 percent of marriages in the U. S. will end in divorce if current trends continue. This number is significant and since assets must be divided, it is essential that all facts be considered when doing so. Often those who are unaware of the GPO and the WEP count on some spousal Social Security, later to find out that is money they won't get.
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According to the U.S. Census Bureau, slightly more than one in four households consisted of a person living alone in 2006. It is well known that life as a one person household is very COSTLY. Will these people be able to survive on a reduced income? It is not unusual for their retirement income to be less than 50% of full income due to the GPO & the WEP. This could be a family member. Are you content to let this continue, by silently agreeing to the provisions in place? That is what lack of action means.
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Death happens to the young, the middle age and especially to the old. Generally speaking, couples share living expenses and count on each others income to make ends meet. Imagine already living on a retirement income or less than what you now earn. Then imagine that your spouse passes away and his/her reduced income disappears. Would you be able to survive? That is exactly what happens over and over again to widows and widowers affected by the GPO & the WEP. What a reward for a life of service!
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It has been clearly shown that these laws are punitive. It should also be evident that Congress is not motivated to really act to correct these wrongs. There has been some movement in Congress and some of the pieces are beginning to fall into place. What is needed now to move Congress out of their position of inertia is for us to be the SQUEAKY WHEEL. Then and only then will we see more action on the GPO & the WEP.
Slide 33
I hope you are convinced of the widespread and longstanding discrimination that has been going on behind closed doors. Would you yourself stand for this type of treatment? Will you stand for this type of treatment for your family and friends? I hope not. I believe that once aware of the GPO & the WEP and what it really means, many of you will want to speak up against the GPO/WEP.
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According to some sources, the average family in the US today moves once every six years. This is certainly a factor that should be considered nowadays, and, instead, Social Security law disregards this. It has been said that the average person today changes careers between 3-5 times. The younger the population, the more this applies and the more there will be confusion over Social Security benefits.
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Who are our leaders who will provide us a framework within which to push for change? There are a number of national and state professional associations who have formed a coalition called CARE. In addition there is a recently formed Committee for Social Security Fairness in the San Francisco Bay Area which is a group of all-volunteer retired teachers and public service employees, working to repeal the GPO & the WEP.
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You are no longer at a loss for a plan or alone in your concerns. You have people leading the way. Our numerous professional organizations and the Committee for Social Security Fairness only provide a framework within which to act. THEY can not do the work for us. NOW, it is up to US.
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Joining the fight for repeal of GPO/WEP is not as hard as it might first appear. The most difficult step has already been taken in that you now have an idea of the basic facts and the history of this problem. Talk about this, write about this and ABOVE ALL do not give up! We must keep beating the drum for a full repeal.
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Just remember ONE PERSON can make a difference.
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No Script.
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No Script
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Even if you personally are not affected by this law, you can see that many public employees have been wronged. Please spread the word about this issue and join us in our political action to repeal the GPO/WEP!
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We need NUMBERS to make our voices heard. Be one of them and motivate others to join you in this effort. Form an email chain and use it to distribute all Political Action Alerts! We need EVERYONE to speak up!