You accept a job with the government under a certain set of rules over your retirement benefits.
If those rules change to be less favorable to the employee, as they did in the 1980s when the switch was made from CSRS to FERS, employees who had worked before the switch were offered the option to stay under the old rules so they will earn the retirement that drew them to accept the job in the first place. That principle should work both ways.
In a time when the deficit is expanding possibly beyond our ability to make future payments, I see no basis for increasing retirement benefits beyond the rules that were in effect when the employee accepted employment.
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This isn’t about CSRS to FERS.
This is about people that worked their 40 quarters in a SS covered job, then took job that was not SS covered and worked and received a pension from the 2nd career.
SS benefits from the first job, after full qualification, are reduced because of a second career unrelated to the first.
WW
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and we are talking about government employees. The government does not pay into it. We are talkng about people retiring on government pensions where the government has been their employer for at minimum 20 years, and in most cases more. Did they have other employment before government employment? Some no doubt do, and that should be figured into it. The fact remains however, that for the entire peiod of thier employment with the government, their benefits are only 1/2 paid for.
The result is no different than if the pension were reduced because they were receiving the benefits of social security.
The point is, they understood how their retirement would be calculated when they accepted the job with the government. Obviously, they thought the job was worth it under the rules that applied when they accepted the job. The word “windfall” comes to mind.
You are confused. We are talking about State and Municipal government employees. Both of those employers paid into the SS alternative systems on behalf of the employees. People who did not work in jobs under SS or did not accumulate 40 quarters under SS before working for the State or Municipality do not qualify for a SS benefit. Those that did, or who acquired the necessary quarters in the SS system after working under the alternate system for the State or Municipality do get a SS benefit. It is those people who were penalized by WEP and who now will have that penalty removed. But they still lose the amount that was withheld from the time they began drawing SS benefits and January 2023. For me personally, I applied for SS in May 2017 so I have still lost 36.3% of my qualified benefit for 6 years and 7 months.
Also, none of the time working outside the SS system in those exempt State and Municipal jobs is counted toward calculation of the SS benefit. I don’t know where you got the idea that it does, but you are totally mistaken about that. Only time under the SS system is counted. Furthermore, any quarter in which employee contributions do not meet a certain threshold (I don’t recall the that amount) are not counted either. I had both part-time employment and self-employment (where I had to pay both sides of the employment tax) after I retired from the State, but never reached the minimum quarterly contribution. None of that time or money was factored into my benefit.
state and local governments do not pay the employer portion of ss taxes. governments don’t pay taxes. they pay the employee portion only, its 1/2 paid for.
the regulation regarding excluded employees has nothing to do with whether states and municipalities pay the employer share
But that’s not what we are taking about. We are talking about people who are both qualified for SS benefits and also worked for a State or Municipal Agency that was exempt from SS and had their own alternative program. None of the time that was accrued or money that was contributed by the employee and the employer into those programs is counted in determining the SS benefit. The two systems are entirely separate from the other.
no, thats what you’re talking about, and I’ve already said that for those who qualified before government employment they should get the benefits that are fully paid for at the rate they qualified for when they qualified. Not at a rate commensurate with their government salaries. When determining their benefit level, all of the income they made while working for the government should be counted at zero, or in the event they paid in the employee portion 1/2 of actual income. They should not end up entitled to full benefits at maximum amounts based on income that did not contribute fully into the system.
I … WE … are talking about the SS Fairness Act … the elimination of the WEP. I don’t know what you’re talking about. It’s immaterial to the topic.
no its not. we are talking about giving people who were in government jobs who agreed to forego SS benefits in lieu of pension, or to reduced benefits, full SS benefits. Based on what income?
People generally have 45-50 year working lives. If you retired from government service after 30 years you’ve at most 20 years in the private sector… 30 years ago. What are the full benefits going to be calculated against? The not paid for or not fully paid for $150K salary they retired with; or, the $6 per hour fast food job that was fully paid for 30 years ago?
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That is completely false. They did not agree to forgo SS benefits. They agreed to join a new system that promised to be an alternative to SS where their contributions would be held in trust and grow with interest in their name rather than collectively, without giving up anything they had already earned under SS. But instead, they were penalized for it by having a portion of the benefits they already qualified for withheld. The Bill that just passed and presumably will be signed by Biden corrects that blsitant unfairness.
Based on the income that applied to the system they were under when employed.
If a teacher is in CALPERS, their CALPERS pension is based on time served there.
If the teacher moves to Viriginia and works (SS covered position, and meets the requried 40 quarters), then SS benefits are calculated off that.
You seem to be trying to imply that the SS benefits are claculated based on the time working under CALPERS. That is incorrect. Time in a “not covered employement” for SS does not count toward SS benefits.
WW
hard to believe but we are on the same side on this discussion.
i am glad you will be getting what you deserve from SS since you paid into the system.
Allan
Yes, thanks, but only from January 2023 forward. I will still be out 36.3% of my qualified benefit for 6 years and 7 months.
you are talking about the way it is now, I am talking about the change they are attempting to make
If you’re talking about the Social Security Fairness Act, it does not do what you are saying.
The Act does not provide for double-dipping time. (Getting paid twice for the same work periods).
What it does is remove the penalty for getting a pension from a “non-covered” job and having your social security reduced because of that even though the periods are different.
If you work 20 years in a state job that is no covered by Social Security and earn a pension, then move to a state where your a state job IS covered by Social Security you get so as an example:
- You work in CALPERS for 20 years and earn a pension (say 1980-2000),
- Then move to VA and have a “Covered” job under Social Security (say 2000-2025).
You receive a CA pension for the perioed 1980-2000, and an unreduced SS benefit for the period 2000-2025. The times do not overlap.
As it is now, due to WEP, your SS benefit based on work from 2000-2025 is reduced because of work performed in a “non covered” job for the period 1980-2000.
I think I got that right @Samm ?
WW
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You can read how it works here.
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once again, you have linked to how we do it now, which is the same link I previously provided. Not how it will be done under the act. I see people denying that non covered income will be used in determining the benefit amount. We’ll see, I am not convinced. And none of this changes the fact that their benefits (under your scenario) are only 1/2 paid for. Governments do not pay the employer portion of the tax.
https://www.congress.gov/bill/118th-congress/house-bill/82
Here is a link to the bill. Please point out where it supports your claim that people will draw pensions from a non-covered job and will draw SS benefits based on that same periods/quarters being counted twice for two different jobs (the “un-covered” and the “covered” one).
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Government does pay the 1/2 employer portion. I work for a school system in HR and I’m very familiar with the payroll side of the house. When I get paid, 6.2% of my compensation is paid by me and a matching 6.2% is paid by my school system to the Social Security Administration for a total of 12.4% transfer to the SSA.
I’m a military retiree and so draw a Navy retirement and will start drawing SS this year. However my SS benefit is not reduced by my Navy retirement because I paid into SS (“covered” job) during the full time I was in the Navy. So in that case the same periods are covered and benefits unreduced. But that is NOT what the SS Fairness Act does. It removes the penalty for sequential “un-covered” and “covered” jobs.
WW
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no its not. your 6.2% is paid, governments don’t pay taxes. Working in HR does not give you access to information on whats paid to SS by the school system. You assume it, it is not true. To know whats actually paid, you would have to work in the states treasury department.
