Copyright 1999 The Washington Post
The Washington
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May 21, 1999, Friday, Final Edition
SECTION: METRO; Pg. B09; FEDERAL DIARY
LENGTH: 695 words
HEADLINE:
Headway on Altering Onerous Pension Laws
BYLINE: Mike
Causey
BODY:
Bills that would take some of
the financial sting out of Social Security "windfall" and "offset" rules that
reduce Social Security benefits for many federal retirees are gaining important
pledges of support from members of the House and Senate.
Here's a quick,
oversimplified explanation of the difference between the effects of "windfall"
and "offset" on a Social Security check:
Windfall can reduce -- but not
eliminate -- the earned Social Security benefit of someone who also draws a
civil service annuity.
Offset reduces, and often eliminates entirely,
the spousal or survivor's Social Security benefit -- a benefit based on the
spouse's earnings -- of someone who draws a civil service annuity.
Sen.
Barbara A. Mikulski (D-Md.) has picked up a total of 10 co-sponsors for her
proposal to modify the offset law. Mikulski's bill would exempt from any offset
the first $ 1,200 a month in combined Social Security spousal benefit and civil
service annuity. On the House side, Rep. William J. Jefferson (D-La.) has
corralled an impressive 143 co-sponsors for his offset bill, which is identical
to the Mikulski bill. It, too, would exempt the first $ 1,200 a month of
combined benefits. The offset formula would be applied only to amounts over $
1,200 a month in combined benefits.
Meanwhile, Rep. Barney Frank
(D-Mass.) has introduced legislation to modify the windfall law.
Congress enacted the windfall-elimination provision
years ago to prevent civil service retirees from taking advantage of the
"welfare tilt" in Social Security. That tilt helps people who have low lifetime
earnings under Social Security because they worked at low-wage jobs or worked
for relatively few years in Social Security-covered jobs. Those individuals
receive proportionately greater benefits than do individuals who spent a full
career (30 years or more) at middle- or high-income jobs in which they paid the
full Social Security tax.
The windfall provision can reduce the Social
Security benefits of civil service retirees who put in less than 30 years in
jobs covered by Social Security.
Currently, the maximum reduction in the
Social Security benefit for a civil servant retiring at 62 is a little more than
$ 250 a month.
Under Frank's legislation, there would be no windfall
reduction if Social Security and civil service annuity benefits combined were
less than $ 2,000 a month. From $ 2,000 to $ 3,000, benefits would be subject to
a partial reduction, and amounts of more than $ 3,000 would be subject to the
full formula. Frank's bill now has 57 co-sponsors.
The windfall and
offset provisions have been in effect for years. Reams have been written about
them in The Washington Post, the Federal Times newspaper and in union and
retiree publications. They also are routinely covered in federal agency
pre-retirement seminars. But many federal workers, perhaps most, don't become
aware of windfall or offset until they are approaching retirement, or until they
retire and notice that the Social Security benefit they had expected has shrunk.
Efforts have been made over the years to modify the two provisions.
Obviously, those efforts didn't get anywhere -- or we wouldn't still be writing
about the offset and windfall laws.
But things have changed. Groups
representing union members and organized federal retirees made a good case this
year for modification -- not repeal -- of the two laws. They also have done an
excellent lobbying job on Capitol Hill.
Unions have wised up and are
spending more time courting Republicans, who often been overlooked even though
they now control Congress.
The growing number of co-sponsors makes it
more likely than ever before that the windfall or offset provision, or both, may
be modified this year or next.
At any rate, if you are a retiree who has
been hit by, or a federal worker facing, either provision, things are looking
up.
To those who would look a gift horse in the mouth, it should be
pointed out that assuming the changes are enacted, neither would provide
retroactive payments. Don't push your luck!
Mike Causey's e-mail address
is causeym@washpost.com
Friday, May 21, 1999
LOAD-DATE: May 21, 1999