Golden Opportunities

Government workers, including police, fire fighters, and teachers, provide valuable services to all of us. They make sure our streets are repaired, our garbage is collected, our communities are safe, and our children are educated. And they typically perform these absolutely critical services for relatively low pay.

What’s their reward? I’m sorry to say, but federal, state and local government employees are often punished at retirement time by Uncle Sam. In return for their years of hard work on our behalf, they are unfairly stripped of a portion of their Social Security benefits.  This punishment is called the Government Pension Offset.

Here’s how it works. Normally, as the spouse of a retired worker, you’re able to claim half of your spouse’s Social Security benefits at your retirement.

Let’s say your spouse’s full monthly benefits are $800. You’d normally be entitled to $400 because that’s half.

But if you worked as a police officer and earned a monthly government pension of $600, you wouldn’t be eligible to receive any Social Security. That’s right, all of your spousal Social Security benefits would be taken away just because you worked to keep us safe from crime.  That’s because Uncle Sam says you’re entitled to receive only spouse retirement benefits from Social Security that exceed two-thirds of the amount of your pension.  In my example, two-thirds of your $600 pension is $400. So that’s subtracted from your $400 of Social Security benefits. The government pension totally wipes out your $400 of Social Security benefits in this example.
But wait. Let’s change the picture just a little bit. Instead of working for the city as a police officer, you worked as a security officer for a private company. At retirement, you’ve earned a $600 monthly pension.

Now you’d get to keep your $600 pension and your entire Social Security benefits of $400 as well. That’s because private pensions don’t affect your spousal social Security benefits.

So far I’ve only been talking about how the Government Pension Offset unfairly strips away spousal benefits under Social Security. But there’s also another closely related rule, called the Windfall Elimination Provision, that will reduce even your own Social Security benefits.

If you worked for both the government and a private company, at different times during your life, earning both a government pension and Social Security benefits, your own Social Security benefits are likely to be slashed. There’s a complicated formula, but your Social Security benefits will be cut from 5 percent to as much as 55 percent.
Earlier this year I explained on this show how Social Security discriminates against women who have worked. Now, sadly, you can see there’s another group that is punished by our Social Security system. If you worked for the government, if you served your community, you’ll be punished at retirement.

Several bills have been introduced in Congress to correct this harmful rule.  Contact your federal legislators and ask them to support H.R. 594 in the House and S.349 in the Senate. That’s H. R. 594 and S. 349. Call 202-224-3121, and let your legislators know how you feel.