Social Security Inclusion for Education Employees

Legislation has been introduced to repeal the Windfall Elimination Provision and the Government Pension Offset, provisions intended to ensure fairness in the Social Security formula.

The House of Representatives is considering a bill to repeal the above-mentioned provisions. If passed, the repeal would benefit retirees with government pensions. The current provisions were introduced in the 1970s and ‘80s to ensure those eligible for a state-provided pension and Social Security do not receive the same benefits as those without a state-provided pension.  Despite being in effect for many years, many educators are unaware of these provisions and often are unhappy when they discover their Social Security benefits may be reduced.

While the repeal of these provisions may seem like a victory for educators, it could come with a significant cost to taxpayers, estimated at $196 billion over the next 10 years. Unions representing those currently affected by these provisions are strongly in favor of the repeal. However, they oppose extending Social Security coverage to all state and local government employees.

Research has shown that extending Social Security coverage to all public employees may benefit lower-income workers who solely rely on their state-provided pension. Implementing mandatory Social Security benefits for public employees would eliminate split coverage, as well as the windfall provision and offset. Although no definitive timeline has been provided for a final decision, this legislation may be worth keeping an eye on.

For more information on the topic, check out the articles Why Congress Should Extend Social Security to All Teachers from The 74 and State and Local Government Employees Without Social Security Coverage: What Percentage Will Earn Pension Benefits That Fall Short of Social Security Equivalence? from the Social Security Office of Retirement and Disability.