Dec. 24—Linda Davis knew she needed to start planning for her future retirement, so she decided to meet with a financial adviser.
That’s when she learned she wouldn’t be able to collect the full amount of Social Security benefits she had earned through part-time work and other odd jobs because of her career as a public school teacher.
“I don’t think I would have entered the teaching profession if I had known what I found out later,” said the 75-year-old Portland resident. “I would be guaranteed more money upon retirement if I went into the private sector.”
Davis is among the more than 25,000 Mainers — and nearly 3 million teachers, law enforcement officers, firefighters and other public employees nationwide — who have been prevented from receiving full Social Security benefits because of two laws from the 1970s and ’80s.
The Windfall Elimination Provision reduces the benefits available to public employees who don’t pay into Social Security through their government retirement plans, regardless of their contributions through other jobs.
The other law, called the Government Pension Offset, decreases payments for surviving spouses if they receive their own government pension.
But those restrictions are poised to be eliminated through the passage of the Social Security Fairness Act earlier this month. The bill, co-authored by Sens. Susan Collins, R-Maine, and Sherrod Brown, D-Ohio, is now headed to President Joe Biden for his signature.
“It has always bothered me that people who earned these benefits or whose spouses earned these benefits did not have the kind of security in their retirement years that they should have because of the reduced Social Security benefit,” Collins said in a recent interview.
Collins has been working on repealing the two provisions for years, having held the first Senate hearing on the proposed policy in 2003 as chair of the Senate Government Affairs Committee and later introducing the Social Security Fairness Act in 2005 with the late Sen. Diane Feinstein, D-CA.
Collins credited this year’s success with constituents being more organized in telling their stories, which was key to finally getting the legislation through Congress, she said.
The bill also received overwhelming support in the House of Representatives, where it passed 327-75, before getting approved 76-20 in the Senate. In addition to Collins, it was also supported by the other three members of Maine’s Congressional delegation.
“Across Maine, firefighters, police officers, teachers and other public servants put the well-being of our communities first; it’s past time they receive the benefits they so rightly have earned,” Sen. Angus King, a co-sponsor of the legislation, said in a written statement following the Senate vote.
FOR TEACHERS, A RECRUITMENT GAIN
Maine is among seven states that have state employee pension programs that do not include a Social Security component. As a result, the state is impacted by the two provisions at a higher rate than many others.
Meanwhile, in some states, certain public sector employees do contribute to Social Security through their government retirement plans and therefore are not subject to the two provisions.
Some public sector employees in Maine still pay into Social Security if they also work or have worked in the private sector. Like anyone else, they can access those benefits at age 62 if they’ve paid in for 10 years, though at a reduced rate.
Davis, the retired teacher from Portland, spent about 30 years as an educator. But she also held other jobs — as a secretary, pumping gas, in catering — before her time as a teacher and during summers.
She has a pension from her teaching work, but said it’s “not a livable pension,” so Social Security from her other jobs is an important piece of her retirement.
Right now, because of the Windfall Elimination Provision, she gets 40% of what she’s earned in Social Security, or about $350 per month after Medicare is deducted. She also continues to substitute teach to supplement her income.
She hopes the new law, if it’s signed by Biden, will not only increase her Social Security but make a difference for other teachers and help to address staffing shortages in education.
“There are so many teachers that have part-time jobs,” Davis said. “I would say most teachers do. Why would they enter the teaching profession if they’re going to be punished financially?”
Maine schools are currently facing shortages across several areas, said Steve Bailey, executive director of the Maine School Boards Association and Maine School Management Association.
As a former teacher, principal and superintendent who also did other work outside the school system, Bailey sees about 30% of the Social Security he should be eligible for, or $340 per month, he said.
“People who might have been thinking about coming into education before, they might have said, ‘I can’t risk losing 70% of my pension if I were to leave the private sector,'” he said. “So we view this as a very large recruitment and retention gain for people coming into education. They won’t have to think they’re risking their prior earnings that they had been putting away into Social Security.”
AN ISSUE OF FAIRNESS
Dan Possumato, a retired civilian employee of the U.S. Army, said the Windfall Elimination Provision has prevented him from getting about 45% of the Social Security benefits he earned in jobs before and after his government work.
The 73-year-old Brunswick resident estimates he’s lost about $93,000 in the 13 years, or $600 per month, since he started drawing Social Security in 2011. Although he also has an Army pension, Possumato said the issue is about fairness.
“I worked for this, just like the other people that are drawing more money with the same experience and earnings as myself,” Possumato said. “Why should I be penalized because Congress decided that was an easy target to get more revenue (from Social Security) to someone else? Every time this comes up among my fellow retirees, it’s a sore point.”
Vicky Edwards, a retired teacher from Otisfield, has felt the loss of Social Security through the Government Pension Offset, which reduces the survivor benefits available to the spouse of a Social Security recipient — if the surviving spouse has their own government pension.
Edwards’ husband died a year and a half into retirement. “He had paid in his entire life and he only got the benefit for a year and a half,” said Edwards, 65.
She then learned that the benefits available to her would be reduced by two-thirds the amount of her pension. Other spouses are eligible for between 71% and 100% of their loved one’s benefits, according to the Social Security Administration, whereas the Government Pension Offset can result in the survivor not getting any spousal benefits.
Edwards said she didn’t have an exact number for how much she thinks she will get if the law changes, but estimated it would be “more than hundreds of dollars” per month.
“That’s a big difference in a retirement budget,” she said.
Collins said it was that kind of anecdote that pushed her to change the law. She said opponents argued on the Senate floor that this will move up the date that the Social Security program could become financially unstable.
“The Social Security system is not in good financial shape, that’s right, and that is something Congress will have to deal with,” Collins said. “But in the meantime, it’s not fair to continue this inequitable treatment of our school teachers, our firefighters, our police officers and those who have been serving the community.”
She said she expects Biden to sign the legislation into law and has been in touch with the White House about the possibility of a signing ceremony. From there, she said, it will take time for the Social Security Administration to recalculate the benefits for everyone affected.
The intent is to make the new be retroactive to January 2024, meaning that recipients would see about a year’s worth of back pay that they were previously ineligible for, though Collins said it’s too soon to say when people might receive the retroactive pay.
“I am absolutely elated that we have finally passed legislation to fix this problem,” Collins said. “It’s long overdue.”
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