NTEU Leader Kelley Urges Congressional Action On Unfair Laws Impacting Federal Retirement

Press Release June 9, 2005

Congressional action to either repeal or substantially reform two provisions of law that unfairly hurt tens of thousands of federal workers and retirees is long overdue, the leader of the nation’s largest independent union of federal workers said in testimony submitted to a House subcommittee today.

In that testimony, President Colleen M. Kelley of the National Treasury Employees Union (NTEU) called on Congress to address the severe negative impacts of the Government Pension Offset (GPO) and Windfall Elimination Provisions (WEP). Kelley submitted testimony for a hearing of the House Ways and Means Subcommittee on Social Security.

The GPO unfairly penalizes recipients of government pensions who are also eligible for Social Security based on a spouse’s work record. It reduces the spousal Social Security benefit by two-thirds of the amount of the government pension—in many cases entirely eliminating the Social Security benefit a federal retiree otherwise would be entitled to receive.

The provision has a particularly cruel impact on female federal retirees, Kelley said, many of whom are eligible for smaller federal pensions than their male counterparts because of interruptions in their careers while raising their families or because they worked in lower-paid federal positions.

In effect, Kelley said, GPO penalizes a person’s decision to commit to public service, since the GPO doesn’t apply to individuals who collect private pension benefits and also are eligible for Social Security. The Social Security Administration has estimated that more than 300,000 former federal workers have had their Social Security payments reduced as a result of GPO—a figure that is said to grow by about 15,000 a year.

As for the WEP, the NTEU leader said, it impacts more than 600,000 individuals who currently have their Social Security benefits reduced by as much as 50 percent because of it. The numbers hurt by WEP are estimated to grow by about 10 percent a year.

Under current law, an employee eligible for both Social Security and a pension from work not covered by Social Security—such as under the federal Civil Service Retirement System (CSRS)—finds that a substantially lower benefit formula is applied when calculating the Social Security benefit to which he or she would otherwise be entitled.

“The use of this lower formula, simply because the individual chose to spend his or her career in public service,” Kelley said, “has a devastating and unfair effect on the retirement plans of many federal employees.”

Kelley said NTEU supports legislation introduced by Rep. Howard McKeon (R-CA)—H.R. 147—which would repeal both the GPO and the WEP; the bill has gathered 260 cosponsors. The union also supports similar Senate legislation, S. 619, introduced by Sen. Dianne Feinstein (D-CA) that would accomplish the same purpose, and which has gathered 18 cosponsors; along with H.S. 1690, introduced by Rep. Barney Frank (D-MA), legislation that would restrict the application of the WEP to individuals whose monthly pension income exceeds a specified level.

NTEU is the largest independent federal union, representing some 150,000 employees in 30 agencies and departments.

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