Alexandria, Va. – In response to House Ways and Means Committee Chairman Richard Neal, D-MA, reintroducing the Public Servants Protection and Fairness Act, which would provide relief to civil servants financially punished by the Windfall Elimination Provision (WEP), NARFE National President Ken Thomas issued the following statement:
“The Windfall Elimination Provision has unfairly penalized public servants through reduced Social Security benefits for far too long. Nearly 2 million individuals see their earned Social Security benefits reduced simply because they also held a public-sector job during which they did not pay into Social Security. This bill would provide at least some much-needed relief from the penalty for those currently affected, and it will improve fairness for future retirees.
“NARFE continues to support full repeal of the WEP, as the status quo has harmed too many hardworking and dedicated public servants for too many years. While this bill does not provide WEP-affected individuals the full repeal they are due, it represents a good first step in allowing some relief from this unreasonable penalty. We commend Chairman Neal for his continued leadership on this issue and urge both sides of the political aisle to work together on a compromise that improves fairness, provides real relief for current retirees and, importantly, passes into law.”
- The WEP reduces the Social Security benefits of local, state and federal retirees who worked in Social Security-covered employment (e.g., private-sector jobs) and who also receive a government annuity from their non-Social Security covered government employment (e.g. federal employment covered by the Civil Service Retirement System).
- Normally, Social Security benefits are calculated using a progressive formula in which an individual’s Average Indexed Monthly Earnings (AIME) are multiplied by three progressive factors—90 percent, 32 percent and 15 percent—at different levels of AIME, resulting in the basic monthly benefit. In 2021, the first $996 of AIME is multiplied by 90 percent. AIME of more than $996 through $6,002 is multiplied by 32 percent; AIME of more than $6,002 is multiplied by 15 percent. All three products are added together to produce the regular Social Security benefit. Under the WEP, the 90 percent factor is reduced to as low as 40 percent.
- According to the Congressional Research Service, as of December 2020, the WEP affects 1,948,427 beneficiaries, including 1,836,538 retired workers, 12,520 workers with disabilities, and 99,369 spouses and children. In 2021, the WEP can result in a monthly benefit that is $498 lower than under the regular benefit formula. For a state-by-state breakdown of the WEP, please click here.
- The Public Servants Protection and Fairness Act would provide current Social Security beneficiaries affected by WEP (and for future beneficiaries turning age 62 before 2023) with a $150 per month increase in their Social Security benefits to offset the WEP penalty.
- Social Security benefits for future retirees (those turning 62 in 2023 or later) would be eligible for a new, fairer formula that calculates benefits based on the proportion of earnings covered by Social Security to total earnings. These future retirees would receive a benefit that is the greater of that calculated based on the new formula or the current one.
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