Retirement Insights
Alliance for Retired Americans: Two Million Strong!
By Karen Gilgoff
The AFL-CIO has launched a national grassroots organization that will be a strong new voice for senior citizens and America's working families. The Alliance for Retired Americans is made up of union retirees and community-based senior activists who seek social and economic justice. At the time of the organization's official rollout in May, more than 2 million seniors had signed on as charter members, including all 200,000 who belong to the AFSCME Retiree Program.
AFSCME and other national unions have agreed to pay the full alliance dues for their retirees. So as long as a retiree remains a dues-paying member of the AFSCME Retiree Program, alliance membership will be covered as a special AFSCME benefit. Other seniors can join the group at the annual dues rate of $10.
The new coalition gives AFSCME retirees a way to stand with retirees of other unions to strengthen Social Security, Medicare and other retirement benefits. Together, we can find a solution to the growing cost of long-term care and take on the giant drug companies that force so many seniors to choose between food and medicine.
MAJOR FORCE. The Alliance for Retired Americans will build on the many successes of the National Council of Senior Citizens, which recently ceased operation as a membership organization. NCSC was a major grassroots force for over 40 years. Its many achievements include the enactment of Medicare in 1965. As was the case with NCSC, the alliance will be a truly national organization, with state councils and local chapters around the country. All AFSCME retiree chapters have been awarded provisional charters.
For more information, write the AFSCME Retiree Program at 1625 L St., N.W., Washington, D.C. 20036, or visit the alliance Web site.
Time to Reform Public-Pension Offsets
Approximately 25 percent of AFSCME members and other public employees work in jurisdictions that have never participated in Social Security. These include entire states such as Ohio and Massachusetts, and localities such as Chicago and Los Angeles. Unlike the other 75 percent of AFSCME members, these workers don't contribute to the Social Security system and are not entitled to its benefits based on their public jobs. Their work is covered only by their employer-sponsored pension plans.
Still, some expect to receive Social Security benefits anyway, based on the employment of a Social Security-covered spouse. So it often comes as a surprise to learn that these spousal benefits may be reduced, due to a federally imposed offset.
The Government Pension Offset (GPO) requires that two-thirds of a public pension (from non-Social Security employment) be offset against any Social Security spouse or widow's benefit that a pensioner receives. Federal law equates this portion of a public pension with Social Security.
Under Social Security, retirees get benefits based on their own employment or 50 percent of spousal benefits — whichever is higher. The GPO tries to make this rule apply to non-covered public retirees as well as everyone else. Here's how it works:
Jane Doe retires from a state job with a $600 monthly pension. Her husband John gets a monthly Social Security check of $900. If Jane had never worked, she would receive a Social Security spousal benefit of $450 — half of John's. Instead, she must offset this amount against two-thirds of her public pension check. Subtract $400 (two-thirds of $600) from $450, and Jane is left with a Social Security benefit of only $50 a month.
AFSCME considers that unfair, particularly in light of the sizable contributions retirees make to their public pension plans. That's why the union has lobbied Congress for over a decade to repeal or modify the GPO.
Currently, AFSCME and other groups in our GPO-reform coalition are supporting a bill (H.R. 664) by Rep. William Jefferson (D-La.) that would protect the most vulnerable GPO victims — primarily women receiving low pensions. It allows retirees to keep up to $1,200 a month in combined public-pension and Social Security spouse benefits before the two-thirds offset applies.
Sen. Barbara Mikulski (D-Md.) has introduced companion legislation in the Senate (S. 611). Both bills are gaining steam, with growing bi-partisan lists of co-sponsors.
A similar Social Security offset, known as the Windfall Elimination Provision, reduces benefits earned from a public pensioner's own private-sector employment. WEP-reform bills are also pending in Congress and future issues of Public Employee will carry more details.
