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June 27, 2000, Tuesday

SECTION: PREPARED TESTIMONY

LENGTH: 486 words

HEADLINE: PREPARED TESTIMONY OF KENNETH T. LYONS NATIONAL PRESIDENT NATIONAL ASSOCIATION OF GOVERNMENT EMPLOYEES

BEFORE THE HOUSE COMMITTEE ON WAYS AND MEANS SOCIAL SECURITY SUBCOMMITTEE

SUBJECT - THE GOVERNMENT PENSION OFFSET

BODY:
CHAIRMAN SHAW, MEMBERS OF THE SUBCOMMITTEE, MY NAME IS KENNETH T. LYONS. I AM THE NATIONAL PRESIDENT OF THE NATIONAL ASSOCIATION OF GOVERNMENT EMPLOYEES (NAGE). NAGE IS AN AFFILIATE OF THE SERVICE EMPLOYEES INTERNATIONAL UNION, THE SECOND LARGEST UNION IN THE AFLCIO. NAGE IS PROUD TO REPRESENT OVER 150,000 EMPLOYEES IN FEDERAL, STATE AND LOCAL GOVERNMENT. THANK YOU FOR THE OPPORTUNITY TO DISCUSS WITH YOU THE GOVERNMENT PENSION OFFSET. THIS PROVISION ENACTED IN 1977, REDUCES SOCIAL SECURITY SPOUSAL BENEFITS, i.e., BENEFITS PAYABLE AS A DEPENDENT OF A SOCIAL SECURITY-COVERED WORKER, TO PERSONS WHO RECEIVE A PENSION FROM GOVERNMENT EMPLOYMENT THAT WAS NOT COVERED BY SOCIAL SECURITY. THE GPO IS INTENDED TO PLACE RETIREES WHOSE GOVERNMENT EMPLOYMENT WAS NOT COVERED BY SOCIAL SECURITY AND WHO ARE ELIGIBLE FOR A SOCIAL SECURITY SPOUSAL BENEFIT IN APPROXIMATELY THE SAME POSITION AS OTHER RETIREES WHOSE JOBS WERE COVERED BY SOCIAL SECURITY.

THE GPO LAW ASSUMES THAT THE PUBLIC-PLAN CONTRIBUTIONS THAT EXCEED SOCIAL SECURITY RATES ARE EQUIVALENT OF CONTRIBUTIONS TO A PRIVATE PENSION PLAN. THIS REASONING PRECIPITATED THE 1983 OFFSET REVISION, WHICH REDUCES THE ORIGINAL 100 PERCENT OFFSET TO THE CURRENT TWO-THIRDS.

THE PENSION OFFSET AIMED AT HIGH PAID GOVERNMENT EMPLOYEES ALSO APPLIES TO PUBLIC SERVICE EMPLOYEES WHO GENERALLY RECEIVE LOWER PENSION BENEFITS. IT IS ESTIMATED THAT GPO HAS AFFECTED SOME 271,000 FEDERAL, STATE AND LOCAL RETIREES.

PROPONENTS OF THE PENSION OFFSET CLAIM THAT THE OFFSET IS JUSTIFIED BECAUSE SURVIVOR BENEFITS WERE INTENDED TO BE IN LIEU OF PENSIONS. HOWEVER, WERE THIS LOGIC FOLLOWED ACROSS THE BOARD, THEN PEOPLE WITH PRIVATE PENSIONS WOULD BE SUBJECT TO THE OFFSET AS WELL. BUT THIS IS NOT THE CASE.

WHILE SOCIAL SECURITY BENEFITS OF SPOUSES OR SURVIVING SPOUSES EARNING GOVERNMENT PENSIONS ARE REDUCED BY $2 FOR EVERY $3 EARNED. SOCIAL SECURITY BENEFITS OF SPOUSES OR SURVIVING SPOUSES EARNING PRIVATE PENSIONS ARE NOT SUBJECT TO OFFSET AT ALL.

TO ADDRESS THE PROBLEMS OF THE GPO, THE NATIONAL ASSOCIATION OF GOVERNMENT EMPLOYEES HAS ENDORSED H.R. 1217, THE GPO REFORM BILL, INTRODUCED BY REPRESENTATIVE JEFFERSON OF LOUISIANA. THE JEFFERSON BILL WOULD PERMIT PUBLIC PENSIONERS WHO ARE NOT COVERED BY SOCIAL SECURITY TO KEEP AS MUCH AS $1200 A MONTH IN COMBINED PENSION AND SOCIAL SECURITY SPOUSE OR WIDOWS' BENEFITS BEFORE THE TWO-THIRDS OFFSET IS IMPOSED. THIS IS A TARGETED APPROACH TO GPO REFORM.

THE JEFFERSON BILL HAS OVER 235 COSPONSORS, WHICH INDICATES A GREAT DEAL OF SUPPORT. IT IS OUR HOPE MR. CHAIRMAN, THAT YOUR SUBCOMMITTEE WILL LOOK FAVORABLY ON H.R. 1217. NAGE BELIEVES THAT THE THOUSANDS OF PEOPLE HURT BY THE GPO DESERVE TO LIVE THEIR RETIREMENT YEARS WITH SOME FORM OF FINANCIAL SECURITY. H.R. 1217 WILL BEGIN THE MOVE TO RESTORE EQUITY BETWEEN PUBLIC AND PRIVATE EMPLOYEES IN THE DISTRIBUTION OF SOCIAL SECURITY BENEFITS.

END

LOAD-DATE: June 28, 2000

Document 2 of 26.


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