The Massachusetts Association of School Committees (MASC) urges the Massachusetts Congressional delegation to support repeal of the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP) of the Social Security Act.

Advocates for working Americans have made powerful arguments to repeal these provisions that were enacted when the Social Security trust funds were near bankruptcy in 1983. However, with the trust funds stable and strong, new and stronger arguments support repeal. Doing so will have an immediate and positive impact on public education by removing the barrier that discourages many potentially outstanding individuals from pursuing careers, or second careers, in public school teaching and administration.

Many of our current school district employees entered public education from private sector jobs where they had paid into the Social Security system and under which they anticipated not only retirement benefits for themselves, but also for their spouses and dependents. This changed when the GPO and WEP were enacted and went into effect two decades ago.

The formula for calculating Social Security benefits is complex, especially when determining the lower benefit for people who also worked in the public sector. In short, a Massachusetts public employee may receive a Social Security pension for their private sector employment of as much as $350 less than someone who worked at the identical private sector job for the same period of time. (See footnote.)

The GPO and WEP will continue to pose a special challenge to school districts trying to recruit vocational and technical faculty as well as teachers in mathematics, science, fine arts, and several other disciplines where the private sector posed more lucrative but less rewarding careers.

For example, vocational technical schools attract many able teachers who bring years of private experience in the trades with them to the classroom. They are among our finest teachers because they share years of expert on-the-job training and skills with young students aspiring to enter their trades. Because Massachusetts public school employees have their own public pension system and do not participate as faculty in the Social Security retirement system under which many of them worked prior to teaching, many of our vocational teachers find their Social Security pension benefits reduced under WEP. Unfortunately, many did not anticipate this impact when they entered the teaching profession. Their successors, however, are much more mindful of the impact.

In the past we have always been able to recruit excellent teachers for vocational technical schools from the ranks of skilled tradespersons who were willing to retrain as educators. However, now, as we recruit craftspersons of all ages, but particularly among those who are doing life and retirement planning, we find they are unwilling to risk the loss of their hard earned Social Security pension benefits to enter a public retirement system. Tradespersons who might consider entering teaching in their mid 40s or 50s will, at best earn a public pension equal to 30 to 40% of their pre-retirement wage. Many will earn less. They would consider this career change seriously if they knew they could count on the full Social Security benefit to which they would be entitled had they not earned a separate Massachusetts public pension in their second careers.

When they confront having to sacrifice a significant share of their Social Security benefit to earn a public pension, they are reluctant to make a career switch to work with young students.

In the same situation are highly skilled workers in other professions, including those skilled in mathematics and sciences and other transferable subject matters who are also reluctant to give up Social Security to enter public employment when it means a meaningful reduction to their benefits.

We also note the impact of the Government Pension Offset for spouses establishes a similar disincentive for people to change careers to work in public schools. By offsetting the spouse’s Social Security benefit based on that spouse’s public pension earnings a two tiered system is created. Workers in identical jobs covered by Social Security might generate substantially different pensions for their spouses based solely on where those spouses worked or did not work.

For these reasons, we urge the Congress to repeal the Windfall Elimination Provision and the Government Pension Offset to the Social Security Act. Contact: Kenneth Pereira, President Elect
Massachusetts Association of School Committees

Social Security benefits are based on an "average indexed monthly earnings" figure representing the inflation-adjusted average monthly wages for a worker’s highest 35 years of covered employment. The benefit calculation formula is designed to favor low wage earners by providing them with a higher share of the first earning step than the second or third step. Consider the case of a worker whose AIME is calculated at $4,000 per month and who retires at the normal retirement age. That worker’s monthly Social Security benefit will be based on

Step 1: 90% of the first $606 or $ 545
Step 2: 32% of the next $3,047, and $ 975
Step 3: 15% of the remainder ($347) $ 52
TOTAL BENEFIT $ 1,572

For individuals with public sector employment, the factor in Step 1 would be reduced incrementally to as low as 40% of the AIME.