Every time we think about retirement, we imagine a moment of peace, right? By then, it will have been many years of working and giving our best to achieve that longed-for rest in the golden age. However, there are millions of Americans who dedicated their lives to public service who do not have the same peace of mind when thinking about retirement.
Currently, Social Security rules could leave many retirees with reduced pensions and without the income they expected to receive (generating enormous uncertainty about their future).
Now, a new hope on the horizon seems to be approaching, the Social Security Justice Act, which could change everything by eliminating the barriers that have affected these types of public workers (such as teachers and police officers) for years. This new proposal is raising debate throughout the country, but what does this bill really mean?
What are the WEP and the GPO?
If you don’t understand anything, we are here to explain it to you. Both are rules that were implemented in 1983 and 1977 (respectively), to avoid a kind of “double payment.” Let’s go step by step, those who worked in jobs not covered by Social Security could receive benefits as if they had contributed to the system throughout their working life, in addition to receiving a full pension. It was considered, then, that this type of “payment” endangered the financial sustainability of the system.
The WEP is the measure by which Social Security benefits are reduced (for individuals who also receive an uncovered pension, such as teachers in some states), and this reduction can translate into up to $600 less each month.
For its part, the GPO directly affects spousal and survivor benefits (in the case of orphaned relatives), eliminating them completely for those who receive pensions from uncovered jobs. Sharona Hoffman, a professor of Law and Bioethics at Case Western University, explains that this was created in order to reduce social security costs, but is it fair to penalize public sector retirees in this way?
Social Security Justice Act
This law aims to eliminate these two measures that we have just explained, but the bill has not yet been approved. If it were, it would guarantee that all SSA beneficiaries receive their payments calculated under the same rules, regardless of whether they have uncovered pensions.
So, there could be more than 2 million retirees affected by the WEP and more than 735,000 people facing the GPO. Bar-Or, a professor at Johns Hopkins University, confirms that this change is about correcting a mistake that has been affecting millions of Americans.
What needs to be done to approve the project?
For now, there has been bipartisan support in the House of Representatives, so that is a positive step, however, it still needs to be approved by the Senate, and we will have to wait for the Trump Administration to come back and finish making the decision. There are still questions about whether the measure will be approved or not, but if it is not approved, it would be legitimate to reform the Social Security system in a comprehensive way, to ensure that future generations can also enjoy this program.
How much will this measure cost?
It will be approximately $190 billion spread over the next decade (yes, it could aggravate Social Security’s funding problems).
Why hasn’t it been approved yet?
The future of this law has been left in “limbo” due to the change of political administration, and, as it has not been voted on during the Biden Administration, it will have to be voted on again next year. So, uncertainty and tension among those affected continues to rise while there is no clear answer.
We will have to wait, then, until 2025 to find out what happens with this bill and whether police officers, teachers, and other public sector workers can finally put an end to this nightmare.