Public Servants Protection and Fairness Act ~ H.R. 2337
Lead Sponsor: Congressman Richard Neal of Massachusetts, Chairman of the House Committee on Ways and Means
The Public Servants Protection and Fairness Act of 2021 fixes the Windfall Elimination Provision (WEP) by introducing a new proportional formula, provides meaningful WEP relief to current retirees, includes a benefit guarantee so that no current or future retirees can be worse off as a result of the bill, and ensures that public servants across the nation can retire with the security and dignity they deserve.
Originally, the WEP was intended to equalize the Social Security benefit formula for workers with similar earnings histories, both inside and outside of the Social Security system. However, in practice, it has unfairly penalized many public employees. Currently, 1.9 million Social Security beneficiaries are affected by the WEP. The much-needed reform in this bill provides meaningful WEP relief to current retirees and public employees while treating all workers fairly.
Current Retirees: Immediate Relief Payments
The bill provides immediate relief to current Social Security beneficiaries affected by the WEP. Current beneficiaries (and those turning 62 before 2023) who are affected by the WEP due to their own public service work will receive an extra $150 a month, starting nine months after enactment and continuing for as long as the eligible individuals are receiving Social Security benefits. The relief amount cannot exceed the size of each person’s current WEP reduction.
Future Retirees: New Formula and Benefit Guarantee
Future retirees (those turning 62 in 2022 and later) will be eligible for a new, fairer benefit formula, called the Public Servant Protection (PSP) formula. The PSP formula calculates benefit amounts based on the proportion of lifetime earnings covered by Social Security.
The Public Servants Protection and Fairness Act includes critical protections to ensure that no one receives a lower benefit a result of this legislation. First, it maintains the current WEP exemptions (i.e., for individuals not receiving a pension, and for those with 30 years of coverage) and extends them to the PSP as well. That is, people are exempt from both the PSP and the WEP if they have 30 or more years of coverage or if they do not receive any pension based on their state or local employment.
In addition, the bill provides a benefit guarantee for all future retirees: if someone’s PSP benefit is not as high as their WEP benefit, they will automatically receive the higher benefit. This guarantee is permanent, applying to all future retirees.
About seven in 10 future retirees affected by the WEP will receive a higher benefit under the new PSP formula, with the increase averaging about $75 a month. The remaining three in 10 are protected by the benefit guarantee and will see no change in benefits because they already receive higher benefits under the WEP than they would under the proportional formula due to their specific earnings patterns. They will get to keep that higher amount. Finally, the bill shields millions of other public servants from being newly subjected to the WEP or PSP.
The bill also improves the Social Security Statement for affected workers, so that future benefit amounts will not be a surprise. Finally, it protects the Social Security trust funds with general revenue transfers to cover these costs, so as not to penalize other workers’ retirement security even as we correct the urgent problems with the WEP.
The bill has been endorsed by the following organizations:
National organizations: Alliance for Retired Americans (ARA), American Federation of Teachers (AFT), Fraternal Order of Police (FOP), International Association of Fire Fighters (IAFF), International Union of Police Associations (IUPA), National Active and Retired Federal Employees Association (NARFE), National Association of Retired ASCS/FSA Office Employees (RASCOE), National Association of Police Organizations (NAPO), National Committee to Preserve Social Security and Medicare (NCPSSM), National Conference of State Social Security Administrators (NCSSSA), National Education Association (NEA), National Sheriffs’ Association (NSA), Public Retirees Alliance, Service Employees International Union (SEIU), Social Security Works, United Postmasters and Managers of America (UPMA).
State and local organizations: American Federation of Teachers (AFT)–Massachusetts, Association of Texas Professional Educators (ATPE), Los Angeles County Employees Retirement Association (LACERA), Louisiana Association of Chiefs of Police (LACP), Louisiana Sheriffs’ Association (LSA), Mass Retirees, Massachusetts Coalition of Police (Mass COP), New England Police Benevolent Association (NEPBA), Oakland Police Officers’ Association (OPOA), Ohio Public Employees Retirement System (OPERS), Police Officers Research Association of California (PORAC), Retired Educators Association of Massachusetts (REAM), Texas Retired Teachers Association (TRTA), Western States Sheriffs’ Association (WSSA).
The 139 original cosponsors of the legislation are available HERE.