Let's improve Social Security for all of us

News and views from Rita

Here's something new from Social Security, which has just launched "my Social Security account," a personalized online account people can establish at http://www.socialsecurity.gov/myaccount, beginning in their working years and continuing throughout the time they receive Social Security benefits.

With a "my Social Security account," people can access their online Social Security statement, which provides workers age 18 and over their complete earnings history and estimates for future retirement, disability and survivors benefits. The statement allows workers to verify the accuracy of their earnings each year. This is important since earnings are the basis for determining future retirement benefits. Individuals who currently receive benefits can sign up for a  "my Social Security account" to get an instant benefit verification letter, change their address and phone number, and start or change direct deposit of their benefit payment.

To date, over 13 million people have established an account. There is also a Twitter chat on "my Social Security and Planning for Your Financial Future."

"For those who aren't comfortable with the Internet and prefer to conduct business with us by telephone or face-to-face, we remain committed to maintaining a network of local offices to provide our services, " Acting Commissioner Carolyn W.Colvin said.

For more information, please go to http://www.socialsecurity.gov/myaccount.

Provisions are unfair to public worker retirees

The American public, although divided on a host of issues, mostly agree on one thing – there is overwhelming support for our Social Security system, according to a recent survey conducted by the Pew Research Center. Fifty-nine percent of conservatives and two-thirds of liberals agree that Social Security benefits should be maintained at current levels.

The following information is for those of us who have worked for a private company or were self-employed and had Social Security taken out of our pay and put into a Social Security account, which would supposedly be repaid to us when we retired. If we also worked at some time for either a federal, state or municipal government, we are in for a nasty surprise when we decide to retire.

This surprise is called the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). These are formulas currently used to calculate Social Security benefits, and they penalize government workers, especially many of Alaska's public employees, who contributed to Social Security in past jobs but retire under other "non-covered" government pensions.  WEP and GPO were enacted in the 1980s and are still hurting retirees today. In Alaska, 8,000 people are currently penalized by the WEP and more than 2,500 by the GPO. Nationwide, over 2 million people are being adversely affected.

If you are in this category, your benefits may be cut by many thousands of dollars even though you and/or your spouse have paid the required minimum or more in Social Security contributions. It is not uncommon to be penalized by both GPO and WEP.

If you have had two jobs – one in which you paid Social Security taxes and therefore earned your own Social Security credits, and a public sector job in which you did not pay Social Security taxes (referred to as "non-covered" public employment) – you are penalized by the Windfall Elimination Provision (WEP), and may lose up to 60 percent of your earned Social Security retirement benefits.

Medicare premiums are higher if you lose all Social Security benefits. You will be denied the $255 burial payment sent by the Social Security Administration to other bereaved families, if you are a widow/ widower with a government pension.

The GPO/WEP offsets were based on a decision to treat pensions from certain public positions as if they were the same as Social Security benefits, despite the fact that these "non-covered" state and local positions have nothing to do with Social Security.

According to the 2010 Congressional Research Service Report, the average yearly public pension for those affected by the GPO is $23,244. For a person with this average pension, the GPO can result in an annual loss of more than $15,480 in earned Social Security benefits. Few people can sustain a loss of that much money in retirement.

It is possible for one's spouse to pay Social Security taxes of as much as $90,000 and yet their survivor may receive nothing from what was a contribution of joint marital income. In fact, 74 percent of those affected by GPO lose their entire spousal benefits.

The Social Security Fairness Act of 2013 would repeal the Windfall Elimination Provision and Government Pension Offset. The bill was written by Sen. Mark Begich (D-AK) and co-sponsored by Sens. Susan Collins (R-ME), Dean Heller (R-NV) and Elizabeth Warren (D-MA).

"Many Americans have been paying into Social Security for their entire careers and it is our job as their representatives to uphold the federal government's end of the deal," said Sen. Begich.  "There are responsible ways to cut the budget without hurting our seniors. While I agree that we need to make major cuts to reduce the deficit, let's be clear – Social Security is not the problem."

"Civil servants play a critical role in our local, state and federal governments. It's only right that they receive the retirement benefits they earned," said Senator Dean Heller. "Social Security should not penalize those who dedicate their lives to public service, which is why I am proud to join Senator Begich to advocate for this legislation."

"The (GPO and WEP) were intended to equalize Social Security's treatment of workers. But we are concerned that they unfairly penalize individuals for holding jobs in public service when the time comes for them to retire," said Senator Collins. "The WEP and GPO have enormous financial implications not just for federal employees, but for our teachers, police officers, firefighters, and other public employees."

As always, if you agree or disagree with anything I have written here, please be free to write, email or phone me and I will be glad to discuss the topic with you.

I am still looking for a compassionate person who would like to learn what I do to help others.

Rita Hatch volunteers for the Older Persons Action Group's Medicare assistance program and is an OPAG board member. Call her at 276-1059 in Anchorage, or 1-800-478-1059 toll-free statewide. Her email address is ritaopag@gci.net.

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