Congress Approves Social Security “Fairness” Bill Benefitting Many TRS Members and Other Public Sector Employees/Retirees
The U.S. Senate early Saturday morning (Washington, D.C. time) voted to give final approval to repealing two federal laws that most TRS members — and other public sector workers and retirees nationwide — have despised for decades.
The Senate specifically passed the Social Security Fairness Act (H.R. 82) by a 76-20 margin, with Texas Sen. John Cornyn voting for and Sen. Ted Cruz voting against. The U.S. House previously approved H.R. 82 by a wide margin.
Repeals WEP and GPO
The legislation specifically repeals the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). These two federal laws have, for 42 years, imposed Social Security benefit reduction/elimination penalties on public sector employees, retirees and/or their spouses just because they happened to have worked for a public employer that did not participate in Social Security.
- Note: In Texas, most school districts don’t contribute to Social Security, which in turn triggered the WEP/GPO Social Security benefit penalties. Generally not affected are Texas school employees/retirees from districts working in (or retired from) Social Security participating districts (listed unofficially by Texas Classroom Teachers Association here).
- Also: Several years ago, Hudson ISD (and then other ISDs) used their status as Social Security participating districts to exploit a loophole (described here) that allowed thousands of soon-to-be retiring employees from non-Social Security participating districts to not be penalized by WEP and/or GPO.
In exchange for paying the ISD a fee (typically $300), the employee could “work” his/her last day for the district in a janitorial or clerk position (usually by doing little or no actual work) to qualify for full Social Security benefits. The feds eventually closed the loophole after being sued by a government watchdog group that objected to the scheme.
- Also: Several years ago, Hudson ISD (and then other ISDs) used their status as Social Security participating districts to exploit a loophole (described here) that allowed thousands of soon-to-be retiring employees from non-Social Security participating districts to not be penalized by WEP and/or GPO.
More than 273,000 Texans Affected
The Congressional Budget Office estimates more than 273,000 Texans are impacted by the WEP and GPO repeals: 57,455 had been penalized by the GPO, 169,678 by the WEP and 46,021 by both.
H.R. 82 next goes to President Biden for his (expected) signature, and then goes to the Social Security Administration to adopt implementing regulations.
- Update: The president signed the legislation into law on Sunday, Jan. 5.
The Texas Retired Teachers Association posts frequent updates here.
In Congress’ other major activity culminating early Saturday morning, the U.S. House and Senate agreed to a federal funding bill, which President Biden quickly signed, thus avoiding a federal government shutdown.
