Treasurer Kennedy Supports Changes to Federal Social Security Law

Federal Legislation Could Put an End to Reduced Benefits for Public Retirees

BATON ROUGE, LA — State Treasurer John Kennedy announced today that he supports federal legislation that would change the Social Security law so that certain pension benefits are restored for government retirees.

“Federal Social Security law is unfair to teachers, police officers, firefighters and other public employees, and it needs to be changed,” said Treasurer Kennedy. “The federal government uses outdated and confusing formulas that result in large reductions in Social Security benefits for countless Louisiana citizens.”

The Social Security Fairness Act of 2007 (H.R. 82) would eliminate the Government Pension Offset and the Windfall Elimination Provision from federal law. These two conditions reduce benefits specifically for federal, state and local government employees who do not pay Social Security.

Government Pension Offset (GPO) – If a government employee’s spouse worked in the private sector and paid into the Social Security System, the GPO reduces the amount of survivor benefits for the government employee when his or her spouse dies. Under current law, the benefits would be reduced by two-thirds of the government employee’s own pension check. As a result, the Social Security benefit is often eliminated altogether.

Windfall Elimination Provision (WEP) – The WEP reduces Social Security payments for people who have spent most of their working careers in government jobs but who have also worked in the private sector. These individuals’ Social Security payments are reduced even when they worked in private industry long enough to qualify for retirement or disability benefits.

“Most Louisiana workers or their spouses have paid into the Social Security System at one time or another,” said Treasurer Kennedy. “There are many public employees, however, who do not know about these provisions in the law that will reduce Social Security benefits when they retire. Our seniors have to worry about high prescription drug costs, medical bills and other expenses. They should not have to worry about reduced Social Security benefits.”

Because Social Security benefit statements do not calculate the GPO or WEP, many public employees are unaware that benefits will be lower than anticipated or nonexistent upon retirement. Government employees can access GPO and WEP calculators at www.socialsecurity.gov/gpo-wep for a better estimate of future Social Security benefits.

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