Copyright 1999 The Washington Post
The Washington
Post
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February 19, 1999, Friday, Final Edition
SECTION: METRO; Pg. B09; FEDERAL DIARY
LENGTH: 619 words
HEADLINE: 2
Laws May Surprise Retirees
BYLINE: Mike Causey
BODY:
Many federal workers under the old
Civil Service Retirement System are in for a surprise when they retire and apply
for Social Security benefits. Some of those pre-1983 hires will be hit by the
so-called windfall law when they apply for Social Security benefits earned while
working in the private sector.
A different measure, the
Government Pension Offset law, will have an impact on some
civil servants when they apply for Social Security benefits as the spouse or
survivor of someone entitled to Social Security. Both laws have been on the
books for years, but feds don't learn of them until they apply for Social
Security benefits.
The windfall law means many federal workers will get
a smaller Social Security benefit than they anticipated. Windfall reduces, but
does not eliminate, an earned Social Security benefit for people who spent less
than 30 years in a Social Security-covered job.
The offset law, on the
other hand, deals with the Social Security benefit earned by the spouse of
someone entitled to a federal pension (or other benefit not covered by Social
Security). Offset can eliminate that spousal Social Security benefit for federal
retirees.
Congress enacted the windfall law because many higher-income,
low-time federal workers were collecting what Congress considered excessive
Social Security benefits based on credits they earned for relatively short
periods of time in low-paying jobs covered by Social Security. Social Security
is structured so that low-income individuals can get as much as 65 percent of
their income as a Social Security benefit. Higher-income workers, under Social
Security, get a benefit that equals about 25 percent of their pre-retirement
income.
Until the windfall law was enacted, many longtime, high-income
civil servants retired with good federal annuities and also collected the higher
level of Social Security benefits, often for low-paying, short-service jobs in
the private sector.
The windfall law reduces the Social Security benefit
of CSRS workers (and others whose jobs aren't covered by Social Security) who
spend less than a full career working under, and paying into, Social Security.
Newer federal employees, who are under the Federal Employees Retirement System
exclusively, won't have to worry about windfall. They are paying into Social
Security and earning credit for it.
But for people under CSRS or the
CSRS "offset" system, windfall can be a problem. They will get some benefit, but
not necessarily the amount of Social Security they expected. Their federal civil
service annuity is not affected or reduced.
Rep. Barney Frank (D-Mass.)
has introduced legislation to modify the impact of the windfall law on Social
Security benefits of CSRS and CSRS offset retirees. Sen. Barbara A. Mikulski
(D-Md.) has reintroduced legislation that would modify the impact of the offset
law.
Details on the windfall law are covered in a special Social
Security pamphlet called "A Pension From Work Not Covered by Social Security."
Details on the offset law are available in Social Security pamphlet
"Government Pension Offset."
Each pamphlet explains the
complex formula used to compute what benefits are available both as a basic,
earned Social Security benefit and as a spousal or survivor benefit.
At
9 a.m. tomorrow on WUST radio (1120 AM), Social Security expert Fran Valentine
will discuss the impact of the windfall and offset laws on federal retirees. She
also will explain Social Security benefit levels and regulations.
Training Sessions
At 10 a.m. tomorrow on WUST radio, Phil Hudson
of the USDA Graduate School will talk about special training courses offered by
the school.
Friday, Feb. 19, 1999
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February 19, 1999 
