Several years into her new job as a teacher, however, Mrs. Worcester learned about a serious gap in her retirement plans. Under current law, teachers, firefighters and police officers, who have at some point in their careers worked in the private sector, lose a portion of the Social Security benefits they would otherwise be entitled to. They often lose out on spousal benefits, too, when a husband or wife who retired from a job covered by Social Security dies.
Mrs. Worcester is still working hard, now as a substitute teacher, and last year she taught 125 out of 175 school days. "We are not big spenders," Mrs. Worcester recently told the Senate Governmental Affairs Committee, which I chair. "But I have to face facts – I will not be able to teach forever... I am not bitter about the situation. I just believe I have earned this benefit through years of hard work."
Mrs. Worcester is absolutely right. These provisions are simply unfair and have the unfortunate effect of reducing earned Social Security benefits for many of Maine's teachers and other public employees. The government pension offset (GPO) and windfall elimination provisions (WEP) affect government employees and retirees in virtually every State, but their effect is far more acute in Maine and 14 other States where most state and local employees are not covered by Social Security. These public servants – or their spouses – have all paid taxes into the Social Security system, and so have their employers. Yet, because of these two provisions, they are unable to collect all of the Social Security benefits to which they would otherwise be entitled.
The Social Security windfall elimination provision reduces Social Security benefits for retirees who paid into Social Security and also receive a government pension from work not covered under Social Security, such as pensions from the Maine State Retirement Fund. While private sector retirees receive monthly Social Security checks equal to 90 percent of their first $561 in average monthly career earnings, government pensioners are only allowed to receive 40 percent – a harsh and unjust penalty of $300 per month. The government pension offset reduces an individual's survivor benefit under Social Security by two-thirds of the amount of his or her public pension. Estimates indicate that 9 out of 10 public employees affected by the GPO lose their entire spousal benefit, even though their deceased spouse paid Social Security taxes for many years.
At a time when we should be doing all that we can to attract qualified people to public service, this reduction in Social Security benefits makes it even more difficult for our federal, state, and local governments to recruit and retain the teachers, police officers, firefighters, and other public servants who are so critical to the safety and well-being of our families.
What is most troubling is that this offset most harshly affects those who can least afford the loss – lower-income women. In fact, of those affected by the GPO, 73 percent are women. According to the Congressional Budget Office, the GPO reduces benefits for more than 200,000 of these individuals by more than $3,600 a year – an amount that can make the difference between a comfortable retirement and poverty.
Our teachers and other public employees face difficult enough challenges in their day-to-day work. Individuals who have devoted their lives to public service should not have the added burden of worrying about their retirement. This is an issue that I have heard about at the grocery store, at my church, and even at my 30th high school reunion from my friends who have entered the teaching profession and who are committed to living and working in Maine. They love their jobs and the children they teach, but they worry about the future and about their financial security in retirement.
Maine, like many states, is currently facing a shortage of teachers, and we cannot afford to discourage people from pursuing important careers in public service this way. These two onerous and unfair provisions should be repealed. That is why I joined Senator Dianne Feinstein in introducing the Social Security Fairness Act, which would do just that. In recent hearings before my Committee, my colleagues and I heard testimony about the effect that these provisions have on teachers like Julia Worcester and about the ways in which these provisions can be changed. It is my hope that these continued efforts will help bring about an effective resolution to this problem once and for all, and provide our dedicated public employees the retirement security they have earned.