Unfairness on Pensions and Retirement

WASHINGTON, D.C. — Annette Williams, 58, retired in April from her clerical job with the city of Los Angeles. Now a member of AFSCME Retiree Chapter 36, she counted on living her Golden Years supported by a $1,300-a-month pension, a Social Security widow's benefit of $812 a month and possible additional benefits from having paid into S.S. for 17 years as a grocery-store checker.

But she was mistaken, she recently told lawmakers on Capitol Hill. A Catch-22, known as the Government Pension Offset (GPO), reduces the spouse and survivor benefits of some public retirees by two-thirds of the amount of their public-employee pension. The GPO effectively wiped out Williams' widow's benefit.

During her working years, Williams was among the 25 percent of all state and local government employees — an estimated 5.25 million people, according to the Social Security Administration — who do not make S.S. contributions on their earnings. They receive only a public pension — earned in a jurisdiction that doesn't participate in S.S. An estimated 95 percent of these "non-covered" state and local employees still qualify to receive benefits, however, because their spouses were entitled to receive them.

When Williams' husband died over two decades ago, she thought she would receive widow's benefits when she reached the eligibility age of 60. With every con-tribution her late husband made into Social Security, "I knew he felt he was providing for my future," she testified before the House Subcommittee on Social Security, which is considering changes to the GPO rule. "Clearly," she added, "that was not the case. Instead, I will be forced to offset my city pension against my Social Security widow's benefit."

And, Williams added, she was hit with another offset called the "Windfall Elimination Provision" (WEP), which affects those who worked in government jobs not covered by S.S. and who also were employed at least 10 years in another job that did require payments into S.S. Because of GPO and WEP, she said, "I won't get the full benefit to which I'm entitled. ... My real retirement is on hold."

AFSCME is supporting legislation to reform both the GPO and the WEP, and make Social Security more fair for public-employee retirees.