The Windfall Elimination and Pension Offset provisions of the Social Security system were passed as part of a Reagan “reform” of the system in the mid 80’s. At the same time all federal employees were required to begin paying into Social Security and Medicare in addition to their federal pension/health care program. That included elected officials, eg; congresspersons. This “reform” was to infuse into the system more dollars to “save the system from bankruptcy.” Here is the kicker: Federal employees who do a whole career…twenty to thirty years..and who earn an average $18K a year will be eligible for BOTH their federal pension/health care and a FULL social security payment based on those earnings. Question: Why was it fair to “save money” by penalizing various state, municipal and educational employees who had their own retirement programs but not fair to penalize federal employees. Basically teachers, for example, will be penalized around $250-300 from the “basic” social security amount, which is around $600. Then any additional earnings credit will be applied to calculate what a retiree might expect. That is the pension offset. The windfall elimination clearly assumes teachers, et. al. do not need to receive a spousal survivor benefit because that would be a “windfall.” So, the bottom line: It pays to be a federal employee/retiree.
Submitted by: Larry Smith
Date Submitted: 6-24-07