SENATOR COLLINS INTRODUCES BILL TO CHANGE UNFAIR RETIREMENT BENEFITS POLICY

Washington, DC—Senator Susan Collins joined Senator Dianne Feinstein (D-CA) today in introducing the "Social Security Fairness Act." This bill would repeal two sections of current law – the windfall elimination provision (WEP) and the government pension offset (GPO) that unfairly reduce earned Social Security benefits for many public employees, including teachers, police officers, and firefighters when they retire.

"Almost one million retired government workers across the country have already been adversely affected by these two provisions, and millions more stand to be affected by them in the future. Individuals who have devoted their lives to public service should not have the added burden of worrying about their retirement," Senator Collins said. "Furthermore, 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 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."

The Social Security windfall elimination provision reduces Social Security benefits for retirees who paid into Social Security and who 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 $612 in average monthly career earnings, government pensioners are only allowed to receive 40 percent -- a harsh and unjust penalty of more than $300 per month.

The government pension offset reduces an individual's survivor benefits under Social Security by two-thirds of the amount of his or her public pension. It is estimated that nine out of ten public employees affected by the GPO lost their entire spousal benefit, even though their deceased spouses paid Social Security taxes for many years.

While the GPO and WEP affect public employees and retirees in virtually every state, their impact is most acute in 15 states, including Maine. Nationwide, more than one-third of teachers and education employees, and more than one-fifth of other public employees, are affected by the GPO and/or the WEP. This offset is most harsh for those who can least afford the loss – lower-income women. 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.

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