Even though 2023 is winding down, these past few weeks have been busy on a few different fronts. Social Security, municipal health insurance, our legislative proposals, and COLA improvements are major areas of focus. Mass Retirees members should look to this week’s email report for a copy of our Congressional testimony on ending the Social Security WEP/GPO laws. This issue, along with a local focus on improving the pension COLA, will remain a major focus for 2024. We are working closely with Governor Healey’s Administration and the legislative leadership with the hope of passing a two-pronged approach to the COLA in 2024. First, we are strongly advocating for an increase in the State and Teachers COLA base. Second, the time has come to convene a new COLA Commission – just as we successfully did in 1996 – to create a better method for funding the future growth of the COLA base. Our pension system’s investment returns continue to perform well, and that success must be shared with public retirees through improved COLA benefits. Learn more and become a member at www.MassRetirees.com…(read more)
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WEP/GPO Testimony & Pension COLA Improvements
Testimony about the unfairness of the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) has been a hot topic in recent years. These provisions have affected the retirement benefits of many public employees and their spouses, causing financial hardships for retirees who rely on their pensions.
The WEP affects individuals who work in jobs where they do not pay Social Security taxes, such as teachers, firefighters, and police officers. The formula used to calculate Social Security benefits is adjusted for these individuals, resulting in lower monthly payments. The GPO affects individuals who are eligible for both a pension based on their own work and Social Security spousal or survivor benefits based on their spouse’s work. The GPO reduces or eliminates these spousal or survivor benefits.
The National Active and Retired Federal Employees Association (NARFE) has been actively advocating for improvements to these provisions. In 2019, NARFE’s National President Ken Thomas testified before the House Ways and Means Committee, urging Congress to reform the WEP and GPO to provide fairer treatment for affected retirees. He emphasized the need to eliminate the penalties and replace them with a fairer formula that reflects an individual’s actual contributions to Social Security.
Additionally, NARFE has also been advocating for improvements to the Cost-of-Living Adjustment (COLA) for federal retirees. The current COLA calculation does not adequately keep pace with the rising cost of living for retirees, resulting in diminished purchasing power over time. NARFE has been urging Congress to adopt a more accurate and equitable method for determining COLAs that better reflects the actual expenses incurred by retirees.
The testimony and advocacy efforts of NARFE and other organizations have sparked conversations among lawmakers about the need for reform. In 2021, the Social Security Fairness Act was reintroduced in the House and Senate, which aims to address the WEP and GPO. Additionally, there has been bipartisan support for improving COLAs for federal retirees.
It is clear that there is growing recognition of the need to address the unfair impact of the WEP and GPO on public employees and their spouses, as well as the need for more accurate and equitable COLAs. As retirees continue to face financial challenges in their golden years, it is crucial for Congress to take action to improve these critical aspects of retirement benefits.
In conclusion, the testimony about the WEP and GPO, as well as the advocacy for improved COLAs, has shed light on the financial struggles faced by public employees and federal retirees. It is imperative for Congress to prioritize the reform of these provisions to provide fairer treatment and better financial security for America’s retirees.
The theory is that the public pension hides lower wages that qualify Social Security recipients for favored benefit amounts. The reality is that most state/county plans that have these pensions, do so at the expense of having: 1. The option to contribute to Social Security instead of the state plan, & 2. A 401K plan that the employer (in this case, the state) adds employer contributions to (just as a private employer would). Thus, the state pension retiree is discriminated against, as if Social Security ought to lower its payments to retirees that were given private employer funds to 401k's, etc.
For those advocating to place more financial pressure on the social security system, good luck. Few if any of you show any indication that you know how state public pension systems work. I have paid taxes in Kentucky for over 50 years. My taxes have been used to pay public pension benefits and used to pay down public pension unfunded liability. If you feel that you deserve SS benefits because you paid into the SS system, there is no difference in that than me asking for public pension benefits because I've paid into Kentucky's public pension system for far more years than you paid into SS. This is about poor money management and the desire to live beyond means on the backs of others. In our household there is two retirement incomes. One is teachers' retirement, and one is social security. We live very comfortable with zero financial worries; plus, with our retirement income we contribute the $7,500 dollars maximum into a ROTH IRA. I planned out retirement very carefully. I shouldn't have to pay for your poor life choices. I will be leaving my Daughter a financial legacy, not $44 billion dollars' worth of unfunded public pension liability.
It is true that the state costs would be higher than local, but the state also has the ability to raise more money. It was the state who neglected to put in their share for so many years that caused the unfunded liability. The workers put in their share every pay check. We have plenty of money to fund migrants and other "causes' the legislature deems important in the moment. We get shuffled into the "meatball" drawer year after year. Small towns are doing the right thing., so can the state. I won't be voting for anyone in the next election unless retirees become a priority. I am one who does not get any social security so my pension is it. period. NO more lies from politicians who say "I have your back" at election time. It is time for them to pony up and make us a priority.
This is what's wrong with public pensions in America. Public pensions are a huge burden on state budgets. Obviously, you don't care.. https://wirepoints.org/wp-content/uploads/2018/07/Overpromising-has-crippled-public-pensions.-A-50-state-survey.pdf
You are delusional. This link is a financial report for five of Kentucky public pension plans. Taxpayers, 90% of which are in the private sector are contributing $5.82 dollars for every $1.00 members in these plans are contributing. By your OWN LOGIC those in the private sector are eligible for public pension benefits. https://www.kyret.ky.gov/Publications/Books/2022%20SAR%20(Summary%20Annual%20Report).pdf
If public servants are eligible for social security benefits because they contributed to SS, why aren't those in the private service sector eligible for public pension benefits for their contribution to public pensions systems? Private sector taxpayers are paying dearly to keep public pension systems for going insolvent? What's the difference?