Teacher Unions & Firefighters Back H.R. 4540
OCTOBER 9, 2019: Less than two weeks following the filing of new federal legislation aiming to reform the Social Security Windfall Elimination Provision (WEP), a strong showing of national support has quickly enveloped H.R. 4540.
Several of the largest unions representing public workers have now endorsed the bill. The support of the National Education Association, the American Federation of Teachers, the International Association of Fire Fighters, and the National Active and Retired Federal Employees Associationare major developments that demonstrate the viability of the proposal.
Local organizations such as the New England Police Benevolent Association, as well as the Retired Educators of Mass. and the Texas Retired Teachers Association (TRTA) are also in support. Additionally, support from Social Security Works and the National Committee to Preserve Social Security and Medicare indicate that the legislation has passed muster with private sector advocacy groups as well.
Filed by Massachusetts Congressman Richard Neal of Springfield, the bill provides relief from the WEP law for both current and future retired public employees who receive pension benefits from employment not covered by Social Security. The latest data from 2018 shows that nearly 2 million retirees across the country are now impacted by the WEP – a number that steadily grow as new retirees begin collecting benefits.
Organizations Supporting H.R. 4540 (in order of date of endorsement, as of 10/8/19)
- Mass Retirees Association
- Texas Retired Teachers Association (TRTA)
- Social Security Works
- National Committee to Preserve Social Security and Medicare (NCPSSM)
- National Education Association (NEA)
- American Federation of Teachers (AFT)
- International Association of Fire Fighters (IAFF)
- National Active and Retired Federal Employees Association (NARFE)
- New England Police Benevolent Association (NEPBA)
- Retired Educators Association of Massachusetts (REAM)
For the past six years, Mass Retirees has worked together with the TRTA to spotlight WEP reform as a front burner priority within Congress. Working hand-in-hand with Neal and his Texas counterpart, Republican Congressman Kevin Brady, we have helped develop a series of WEP reform proposals that have evolved to become H.R. 4540. In July, Brady filed his own version of WEP reform legislation (H.R. 3934) that differs slightly from that filed by Neal in September.
As Chairman and Ranking Member of the House Ways and Means Committee, Neal and Brady maintain a close working relationship. This extends to the issue of WEP reform, which has long been viewed as a bipartisan issue. And while having filed differing proposals to reform WEP, both Congressmen have publicly vowed to continue working together toward a common solution that can successfully pass Congress this session.
Neal’s proposal, H.R. 4540, would install a monthly WEP relief payment of $150 for retirees who first become eligible for Social Security before 1/1/22. Under Brady’s proposal, a $100 per month rebate would be paid to impacted retirees. In order to be eligible for Social Security, a retiree must be at least 62 years of age AND have 40 or more quarters under Social Security. Please note, 40 quarters (10 years) is the minimumrequirement for eligibility to receive a Social Security benefit. Workers covered by Social Security for a full career have at least 120 quarters (30 years) of substantial earnings under the federal program and receive a full benefit.
Both Neal and Brady propose a new proportional Social Security formula for those first eligible to receive Social Security benefits on or after 1/1/22. This new formula accurately calculates time within the Social Security system vs. time under a non-covered plan. Each holds harmless those public employees with substantial service under both Social Security and a non-covered pension. This provision addresses concerns that had been raised regarding the so-called “30-year rule”, whereby public retirees with 30 or more years of substantial earnings under Social Security are fully exempt from the WEP.
However, where these proposals differ is the length of time afforded the hold-harmless clause. While Neal’s H.R. 4540 makes the hold-harmless permanent into the future, Brady’s H.R. 3934 sunsets the provision after 1/1/2061.
Some 73,000 Massachusetts residents have seen their Social Security benefits reduced by the WEP, with retirees losing hundreds of dollars per month on average. Massachusetts is one of 7 states where most, if not all, of the public workforce is outside of Social Security and does not contribute to the federal program as a government worker.
As previously reported, reform of the Government Pension Offset (GPO) law is not included within Neal’s or Brady’s proposals. The GPO impacts spousal Social Security benefits. At this time, a consensus does not exist nationally or within Congress on how to reform the GPO.