Somebody named “Fred” commented on the blog post I wrote the other day about the WEP/GPO.
The WEP is a provision in the current Social Security statutes that reduces teachers’ earned Social Security benefits by up to 90% when we are also in a public pension system like Illinois’ TRS.
The GPO provision takes away spousal benefits from TRS members.
I wrote that President Biden has said the punitive provision should be repealed and Illinois’ Republican Congress member Rodney Davis is sponsoring a bill to do the the same. As in previous years the bill will have lots of supporters but will fail to be enacted. It’s all political theater.
“Fred” wrote, “Another law that public employees don’t like. Imagine the cost to employers and taxpayers and fixing it! Hasn’t it been a bargaining chip in negotiations for years: raise our pensions because we don’t get social security? Would you agree to reducing your teachers’ “full career” pension by the amount of social security? With pick-up plans, most of teachers’ own pension contributions are made by the schools in all events. And with current funding deficits, based on actuarial manipulation, your pension security is getting worse as each day goes by.”
Amazingly, every single sentence in this comment is false.
Not some. Everything except the part about another law public employees don’t like.
“Imagine the cost to employers and taxpayers and fixing it!” write “Fred”.
We don’t have to imagine. The Illinois legislature passed a bill creating a Tier 2 pension system for every teacher hired after January 1st 2011. It was a reform intended to reduce the pension debt and state liability. The legislation reduces the benefit and lengthens the number of years a teacher must work to qualify.
When the first Tier 2 teacher retires, their pension benefit will likely be less than they would have received under Social Security and will violate federal law. School districts and taxpayers will be on the hook for millions of unpaid retirement benefits.
It was another brilliant fuck up by the Illinois General Assembly that remains to be fixed. It is a pension bomb ticking away.
“Fred” asks: Would you agree to reducing your teachers’ “full career” pension by the amount of social security?
How stupid do you think teachers are? We paid 9.4% of our paychecks every week into TRS. Social Security payments are around 6% with the employer paying a equal share. School districts in Illinois save that 6% and pay around 1% and we paid over 3% more than with the Social Security tax. For local school districts and taxpayers the current system saves them money. By the way, local taxpayers are teachers too. A fact often forgotten by those like “Fred”.
The Social Security benefit we are denied under the WEP “windfall” provision are the contributions to Social Security for summer work we did or work in the private sector before or after our careers in teaching.
And “Fred” is also wrong about who pays our pension. Not school districts primarily. 44% of our pension is paid for by return on the investment of our shorted pension funds. If fully funded the return on our investments would be far greater in an actual dollar amount. Working teachers pay into it every paycheck. The state legislature budgets a portion but it is never the actuarial amount. The General Assembly always shorts their payment, which is the only reason for the $1.4 billion dollar liability.