By JOHN D. BOYLE, Four Points News
In a country that prides itself on valuing education and public service, policies like the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) stand as stark contradictions to the American Dream. These Social Security penalties disproportionately impact teachers, firefighters, police officers, and other public servants—many of whom have already made significant financial sacrifices to serve their communities.
Take, for example, the story of Kari Michalek, a 54-year-old mother of two and long-time Cedar Park resident and Vandegrift teacher, who shared her experience of facing these penalties. After a successful career in the private sector, during which she paid Social Security taxes from 1992 to 2007, Michalek made the difficult decision to stay home and prioritize raising her children.
“I paid substantial earnings into Social Security from 1992 to 2007. After having our second son in 2007, I prioritized my family and stayed home to raise our boys,” said Michalek. “The whole time I was home, I was thinking, ‘What’s next?’ I felt like I left a job where I was just chasing dollars, and I wanted a job where I was serving people.”
In 2014, Michalek’s desire to serve her community led her to become a public school teacher in Leander ISD. She saw teaching at Vandegrift as a way to contribute to her community and support her family. However, this decision came with unforeseen financial consequences.
“Little did I know the severe financial consequences I would face due to the WEP and GPO,” she shared. “I’m thankful that a recent conversation with my financial advisor showed me the consequences of this decision. I only have 16 years of substantial Social Security earnings. I need 30 years of substantial earnings, otherwise I will fall prey to WEP and GPO.”
Michalek’s financial reality has forced her to make a difficult choice. “As a result, I will leave my teaching position at Vandegrift High School and Career and Technical Education lead role in Leander ISD at the end of the 2024-25 school year. Leander ISD is one of the many Texas school districts that pays into TRS instead of Social Security,” Michalek explained. “To secure my financial future, I must give up a job that I love as a public school teacher, which contributes to the future success of our country, to find a job because it pays into Social Security.”
“Why on earth would our government penalize teachers? I took more than a 50% pay cut to move into education. I already made a tremendous financial sacrifice. Now I learn my sacrifice is worse as I will get penalized by WEP and GPO,” she shared.
What Are WEP and GPO?
The Windfall Elimination Provision (WEP) reduces Social Security benefits for individuals who also receive a public pension from work not covered by Social Security. The Government Pension Offset (GPO) further penalizes public servants by reducing spousal or survivor benefits based on the individual’s government pension. Both policies disproportionately affect those who split their careers between the private sector and public service, as is often the case for teachers and other public employees.
For Michalek, the WEP will slash her earned Social Security benefits because she has fewer than 30 years of substantial earnings under the Social Security system. With only 16 years of substantial earnings, she faces a future where her Social Security benefits will be drastically reduced. Moreover, GPO will eliminate her ability to rely on spousal or survivor benefits, further jeopardizing her financial security in retirement.
Because Leander Independent School District is one of the many Texas school districts that does not contribute to Social Security, Michalek and others are forced to prioritize their financial future by seeking employment in private sector roles that pay into Social Security—sacrificing their passions for teaching and commitment to their communities.
Expert Advice: The Role of Financial Planning
Navigating the complexities of Social Security and public pensions is no small feat. Andrew Mason, a certified financial planner with Ameriprise Financial Services in Austin emphasizes the importance of seeking professional advice.
“I believe you could take an entire semester in college on Social Security and still not understand all the details and nuances of the system. These situations can be very complicated and are specific to each person. Anytime a person moves from employment that pays into Social Security to a role with any type of pension program, I advise seeking a few opinions from licensed financial advisors. This will ensure all the positives and negatives are identified before making the change,” Mason said.
He added, “There are also options for some pension programs to roll over the funds into a personal retirement account instead of drawing from the pension, but each program is different and governed by different rules and regulations. Seeking advice is advisable and essential in successful tax and retirement planning.”
Why Change Is Needed
The unfairness of these policies is evident, many say. Across the United States, WEP and GPO discourage talented individuals from pursuing or staying in public service. This not only harms public servants but also undermines the quality of education, public safety, and other essential services. These policies fail to recognize the invaluable contributions of public servants, leaving many to face financial insecurity in their retirement years, according to advocates for change.
The U.S. House passed the Social Security Fairness Act on November 12, 2024 in a vote of 327 to 75, bringing the removal of the WEP and the GPO one step closer to reality. The Senate’s companion to the Social Security Fairness Act currently has 62 cosponsors and the votes to pass, but first must be brought to the floor by leadership to enable a floor vote. Senate Majority Leader Chuck Schumer attended the recent December 11th rally on the steps of the U.S. Capitol and expressed his support to bring this legislation to the Senate floor for a vote before the current congressional session ends January of 2025. “I’m here to tell you that the Senate is going to act on the Social Security Fairness Act. What’s happening to you is unfair, it’s un-American and I will fight it all the way.”
By repealing WEP and GPO, lawmakers can ensure that public servants receive the benefits they have earned through their hard work and dedication — both in the private sector and in public service. If the Senate fails to act before this session ends, the Social Security Fairness Act faces a “School House Rock” fate as the process will have to start over in committee reviews with a new Republican controlled Congress.
A Call to Action
Like Michalek and many others who work in the public sector, they have to make the very hard choice between serving their communities and securing their futures. Many want change which they say takes collective action and contacting the U.S. Senators to express support for the repeal of WEP and GPO. To them, the Social Security Fairness Act creates a fairer system that honors the contributions of those who work in the public sector and ensures their financial security in retirement.
www.senate.gov/states/TX/intro.htm
UPDATE from January 5, 2025
Congratulations Bill, You’re A Law: President Signs Social Security and Pension Fairness Act
By JOHN D. BOYLE, FOUR POINTS NEWS
President Joe Biden signed the Social Security and Pension Fairness Act into law on January 5, 2025, marking a historic victory for public sector workers who have long faced inequities in retirement benefits. The law aims to rectify decades-old disparities caused by the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO), repealing both.
The WEP and GPO had significantly reduced Social Security benefits for individuals who transitioned from private-sector jobs into public service roles, such as teaching, firefighting, and law enforcement. These provisions often penalized workers who paid into Social Security during their private-sector careers but later earned public pensions, resulting in reduced or eliminated Social Security benefits.The Social Security Administration (SSA) is currently evaluating how to implement the Act and will provide more information as it becomes available. Additionally, organizations such as the International Association of Fire Fighters (IAFF) are monitoring the implementation process and will update retirees once the Act has been fully implemented.
With the new law in place, affected retirees and workers will see eventually their benefits recalculated, ensuring fairer treatment for those who contributed to Social Security. This change is expected to restore full or partial benefits for millions of Americans, offering much-needed financial relief and stability in retirement. The Social Security Administration will begin recalculating benefits, with eligible recipients notified of adjustments to their monthly payments.
For personalized assistance, workers can visit the SSA’s official website at (https://www.ssa.gov) or contact their local SSA office. It’s advisable for individuals to consult with financial advisors or retirement planning professionals to understand how the repeal of WEP and GPO may affect their specific situations.