For Immediate Release
Wednesday, September 10, 1997
Public Employee Retirees in Twelve States Would Keep Substantially More Social Security Income Under Proposed Legislation
Washington, DC —Thousands of public employee retirees in a dozen states would keep substantially more Social Security income under legislation introduced today by Congressman William Jefferson (D-LA).
Chrystal Carroll of Cortland, Ohio, who is denied approximately $393 each month as a result of the current Government Pension Offset (GPO) provisions, joined Congressman Jefferson at a news conference today.
Carroll, a retiree member of the American Federation of State, County and Municipal Employees (AFSCME), AFL-CIO said: "Somehow, when Congress first took up the Government Pension Offset, they must have failed to recognize how much public employers and public workers contribute to our pension plans." The retired food service worker of 28 years in the Warren, Ohio city school system added "And they must have jumped to the conclusion that public retirees get higher pensions than most of us really do."
Carroll is one of thousands of low-pension women — retirees of federal, state and local government — who are required by the federal GPO law to offset two-thirds of their public pension against any Social Security spousal benefit that they would normally receive. The GPO affects only those retirees who were not covered by Social Security during their years in public service.
Because the legislation affects the pensions of many of AFSCME's public employees and retirees, AFSCME International President Gerald W. McEntee noted the following: "These public retirees did not pay into Social Security when they worked, but they made even larger contributions to their public pension plans, as did their employers. In Ohio, where Chrystal Carroll lives, public employees pay eight percent of their paychecks into their pension plans and their employers pay 13.5 percent. This compares with employer/employee contributions of 6.2 percent under Social Security."
"The GPO law, as now configured, doesn't adequately recognize these facts," added President McEntee. "As a result, these public retirees lose when compared with many other older women. For example, had they never worked a day outside the home, they would receive a full Social Security spouse benefit with no offset. They also lose out in relation to private sector retirees who are covered not only by Social Security, but by employer-sponsored pension plans. Private sector workers rarely contribute to their pension plans, which are usually funded entirely by employers. Yet these workers can expect to retire with full Social Security benefits and full pensions. HR 2273 would go a long way toward undoing the harm caused by the GPO."
Under the current government pension offset provisions, the Social Security spousal benefit of a government employee in non-covered employment is reduced by two-thirds of the civil service pension benefit. The GPO provisions affect large numbers of public employees in the following states: Ohio, Alaska, Maine, Louisiana, California, Nevada, Massachusetts, Rhode Island, Illinois, Texas, Colorado and Minnesota. (Those receiving a private pension are not affected by any pension offsets.) In Carroll's case, she receives a public pension of $526 a month and her husband's Social Security benefit per month is $1004. The current law "virtually destroys" her spouse's benefit, reducing it to $65 after deducting her Medicare premium of $43.80.
However, HR 2273 — the Government Pension Offset Reform Act — would modify the current law to make it more fair for the lowered pensioned workers such as clerical employees, school bus drivers, cafeteria workers and teachers' aides, who suffer the most under the existing provisions. The bill would allow pensioners and widows affected by the GPO provisions to receive a minimum benefit of $1,200 monthly before the GPO provisions could be imposed.
The legislation will be referred to the House Ways and Means Committee.
