Social Security Issues

A. Repealing the "Windfall Elimination Provision" and "Government Pension Offset"
The FOP strongly supports the passage of the "Social Security Fairness Act." This legislation would fully repeal both the "Windfall Elimination Provision" (WEP) and the "Government Pension Offset" (GPO) in current Social Security law. The bill has not yet been introduced in the Senate.

The WEP was enacted in 1983 as part of a large reform package designed to shore up the financing of the Social Security system. It went into effect in 1985 and applies a modified formula designed to reduce the amount of the Social Security benefits received by individuals who collect a government pension. The ostensible purpose of the WEP is to remove a "windfall" for persons who spent some time in jobs not covered by Social Security (like public employees) and also worked other jobs where they paid Social Security taxes long enough to qualify for retirement benefits. The practical effect of the provision on low-paid public employees outside the Social Security system is that they lose up to sixty percent (60%) of the Social Security benefits to which they are entitled—a loss, not an adjustment, for a "windfall." This creates a very real inequity for many public employees, particularly police officers, who retire earlier than other government employees to begin second careers which require them to pay into the Social Security system.

We regard this as an issue of fairness, as these public employees are unfairly penalized under current law. The WEP substantially reduces a benefit that workers had included and counted on when planning their retirement. The arbitrary formula, when applied, does not eliminate "windfalls" because of its regressive nature—the reduction is only applied to the first bracket of the benefit formula and causes a relatively larger reduction in benefits to low-paid workers. It also overpenalizes lower paid workers with short careers or, like many retired law enforcement officers, those whose careers are evenly split inside and outside the Social Security system.

Like the WEP, the GPO was adopted in 1983 to shore up the finances of the Social Security trust fund. It offsets the dependent's Social Security benefit to which a spouse or widow(er) is entitled by two-thirds of the monthly amount of any government pension from noncovered employment that the surviving spouse might receive. For example, the wife of a retired law enforcement officer who collects a government pension of $1,200 would be ineligible to collect the surviving spousal benefit of $600 from Social Security upon the death of her spouse. Two-thirds of $1,200 is $800, which is greater than the spousal benefit of $600 and thus, under this law, she would be unable to collect it. If the spouse's benefit were $900, only $100 could be collected, because $800 would be "offset" by her government pension.

Again, the FOP believes this is a matter of fairness and that the offset scheme currently in place penalizes those employees least able to afford it. Law enforcement officers, who often do not participate in the Social Security system, are especially affected.

The Fraternal Order of Police strongly supports the "Social Security Fairness Act."

B. Opposing any legislation that would require the participation of public employees in Social Security
The FOP is committed to fighting any attempt to mandate participation in the Social Security system for all current or newly hired public safety employees. We will actively oppose any legislation which contains a provision that would require newly hired State and local governmental employees to participate in Social Security.

For the Fraternal Order of Police, this is both an issue of fairness and cost. When Social Security was first created in the 1930s, public employees were excluded by design. According to the Social Security Administration (SSA), almost thirty percent (30%) of public employees—7 million people—not covered by Social Security. The Public Pension Coordinating Council (PPCC) estimates that seventy-six percent (76%) of this total are public safety personnel. State and local governmental employers designed pension plans and retirement systems to fit the unique needs of law enforcement officers, public safety officials and other public employees. These pension plans better serve State and local governmental employees and deliver a greater benefit than participation in Social Security. For example, State and local plans take into consideration the significantly earlier retirement age of law enforcement officers and other public safety officers as compared to other, more typical government employees, but Social Security does not. If the Federal government mandates Social Security coverage, it will severely compromise the financial solvency of these State and local plans.

The most recent estimated cost to public employers and employees for the first five years of mandatory participation in Social Security is enormous—$26 billion. According to the SSA, requiring newly hired employees to be covered by Social Security will extend the solvency of the Social Security Trust Fund for only two years. This projection, however, does not take into account the effect of increasing Social Security's unfunded obligations by adding a huge new influx of participants. The newly hired employee would be required to pay 6.2% of his salary into the Social Security Trust Fund. This amount would be in addition to the contribution already paid by the employee into the State or local retirement system. The employer would have to match the employee's contribution—another 6.2% cost to the employing agency for each employee. And that, too, would be in addition to whatever matching contribution must be made by the employer into the existing State or local retirement system.

Clearly, the damage that would be done to State and local governments and the families of the employees cannot be overestimated if the Federal government forces them to pay a new combined tax of 12.4%. This means less take home pay for the employee, potential cut backs in services, equipment and other expenditures on the part of State and local governments. Police departments and other law enforcement agencies stretch every dollar to the limit now—these huge new costs will devastate their budgets and certainly impact on their ability to function as first responders at a time when we need to be improving our homeland security.

The Fraternal Order of Police understands that reforms in the Social Security system are necessary and that certain steps need to be taken if we are to avoid the expected shortfall in 2042. Sometimes proposals sound good on the surface, but after careful examination are revealed to be unsound policies with damaging consequences. We believe that mandating the inclusion of all public sector employees into the Social Security system falls into this category. It is wrong to change the rules almost seventy years later because the Federal government is looking for an easy way to fund Social Security without making hard choices. It is also wrong to impose a $26 billion cost, especially in today's economic climate, on State and local governments and their employees just to extend the Trust Fund's solvency for two years.

The State and local governments who chose not to participate in Social Security did not create this problem, nor did the 5.25 million employees who do not pay into the system. But all of them would be paying a hefty price for participating in their own retirement plans. Destroying the retirement programs of these hard working Americans and raiding the budgets of State and local governments should not be part of the Federal government's solution.

The President's Commission to Strengthen Social Security (CSSS) rejected the mandatory participation scheme in its final report issued on 21 December 2001. The FOP believes that Congress should do likewise and we vehemently oppose any Social Security reform measure that includes mandatory participation in Social Security for State and local law enforcement officers.

The Fraternal Order of Police will strongly oppose any legislation mandating inclusion in Social Security.

Links to More Information about these issues

Fact and Formula Sheet on the Windfall Elimination Provision, SSA Publication No. 05-10045
Fact and Formula Sheet on the Government Pension Offset, SSA Publication No. 05-10007
Testimony of Robert M. Wilson, Deputy Commissioner for Legislative and Congressional Affairs at the Social Security Administration before the House Subcommittee on Social Security (1 May 2003, 108th Congress)
"SOCIAL SECURITY: Issues Relating to Noncoverage of Public Employees," the title of the testimony delivered by Barbara D. Bovbjerg, Director, Education, Workforce, and Income Security Issues at the U.S. General Accounting Office before the House Subcommittee on Social Security (1 May 2003, 108th Congress)
Statement Concerning Your Employment in a Job Not Covered by Social Security, Form SSA-1945
The Cost Impact of Mandating Social Security for State and Local Governments, a report by the Segal Company (May 1999)

News and Letters

04/11/11 Social Security Fairness Act Introduced in the House
Previous Congresses


01/16/08 Testimony of Chuck Canterbury, National President, before the House Subcommittee on Social Security and Committee on Ways and Means.
11/06/07 Testimony of Chuck Canterbury, National President, before the Senate Subcommittee on Social Security, Pensions and Family Policy Committee on Finance.
06/09/05 Testimony of Chuck Canterbury, National President, before the Subcommittee on Social Security and Committee on Ways and Means.
07/20/04 Testimony of Chuck Canterbury, National President, on H.R. 4391, the "Public Servant Retirement Protection Act," before the Subcommittee on Social Security and Committee on Ways and Means.
09/24/03 Testimony of Kenneth Rocks, National Vice President, on S. 349, the "Social Security Fairness Act," before the Senate Committee on Governmental Affairs.
06/17/03 President Canterbury responds to questions posed by Rep. Clay Shaw, Chairman, Subcommittee on Social Security, regarding the repeal of the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO)
05/01/03 Testimony of Chuck Canterbury, National President, on H.R. 594, the "Social Security Fairness Act," before the House Subcommittee on Social Security.
06/27/00 Testimony then National President Gilbert G. Gallegos in support of H.R. 1217, the "Government Pension Offset Reform Act," before the House Committee on Ways and Means, Subcommittee on Social Security.

For more information or elaboration, please do not hesitate to contact the National FOP Legislative Office at (202) 547-8189 or via e-mail.