Labor union leaders, retiree representatives and various legislators testified last week in favor of legislation that would eliminate the Social Security government pension offset for federal employees.
In a hearing before the House Ways and Means Committee's subcommittee on Social Security, federal worker and retiree representatives said the offset rule, which reduces or eliminates former federal workers' Social Security benefits based on their spouses' earnings records, hurts thousands of federal retirees.
"Many of our members have already felt the effects of the government pension offset," National Treasury Employees Union President Robert Tobias said. "Others are not yet aware of the impact this offset could have on their retirement income."
Under current law, when a government retiree who is not covered by Social Security is eligible for a Social Security spousal benefit, that benefit is reduced by two-thirds of the survivor's government pension. For example, if a woman has a government pension of $600 per month from the Civil Service Retirement System and is eligible for a Social Security widow's benefit of $800, her widow's benefit would be reduced by $400 (two-thirds of the $600). This gives her $1,000 per month instead of $1,400.
Robert Normandie, chairman of the Coalition to Assure Retirement Equity, testified that those affected feel they have "been penalized because they worked for the government."
"If they had worked in the private sector, say for IBM, they could receive a company pension and still get their spouse's Social Security," he said.
Thursday's hearing, the ninth in a series of hearings on the future of Social Security, focused on legislation introduced by Rep. William Jefferson, D-La., that would apply the offset rule only in certain situations. Jefferson's bill (HR 2273), would apply the pension offset only to combined annuity and Social Security spousal benefits that exceed $1,200 per month. And even in those cases, only the amount of the combined benefits above $1,200 would be subject to the offset.
Sen. Barbara Mikulski, D-Md., who has introduced a similar bill in the Senate (S 1365), said that legislation is needed to "modify this heartless rule of government that prevents current workers from enjoying the benefits of their hard work in their retirement."
"I want the middle class of this nation to know that if you worked hard to become middle class you should stay middle class when you retire," she said.
The Senate and the House are currently considering both legislative proposals.
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