Social Security and the Public Sector: The Windfall Elimination Provision and the Government Pension Offset

Abstract

The application of social security to most of the public sector has generated measures to address the resulting inequities and a campaign to repeal or modify those measures.

California’s Public Sector Pension Plans in Perspective

“…California teachers are also subject to Social Security's Government Pension Offset and the Windfall Elimination Provision that greatly reduce spousal and survivor benefits as well as any benefits earned from previous or outside covered employment. 15 Table 4 The average service retirement benefit for members retiring during FY 2010 was $48,708. The average age at retirement was 62.2 and the average years of service was 25.5.…”

Social security and retirement timing: evidence from a national sample of teachers

“…With the Social Security system facing potential future solvency issues, policymakers have considered mandating the coverage of all public sector workers to increase the Social Security tax base (GAO-HEHS-98-196, 1998; Munnell, 2000, 2005; GAO-03-710T, 2003; GAO-05-786T, 2005; Nuschler et al ., 2011) and changing rules that determine the level of spousal and survivor benefits for those not covered by Social Security (Diamond and Orszag, 2003; Haltzel, 2004; Kilgour, 2009; Gustman et al ., 2013). Because public sector pensions generally have full retirement ages that are much younger than those of Social Security and private sector pension plans, past research into the impact of Social Security on retirement timing may not be extendable to teachers.…”

“…(2014) estimate that about 3.5% of households in the HRS are affected by either the WEP or the GPO. These programs impact the joint retirement decisions of households and apply to a substantial proportion of teachers (Diamond and Orszag, 2003; Haltzel, 2004; Kilgour, 2009; Gustman et al ., 2013). When considering the implications of extending Social Security coverage to public sector workers, it is important to not only consider the impacts on Social Security solvency, but also how structural changes in public sector workers' retirement incentives will change their own and their spouses’ labor supply decisions.…”

Social Security and Retirement Timing: Evidence from a National Sample of Teachers

“…With the Social Security system facing potential future solvency issues, policymakers have considered mandating the coverage of all public sector workers to increase the Social Security tax base (GAO-HEHS-98-196, 1998;GAO-03-710T, 2003;GAO-05-786T, 2005;Munnell, 2000Munnell, , 2005Nuschler et al, 2011) and changing rules that determine the level of spousal and survivor benefits for those not covered by Social Security (Diamond and Orszag, 2003;Haltzel, 2004;Kilgour, 2009;Gustman et al, 2013). Because public sector pensions generally have full retirement ages that are much younger than those of Social Security and private sector pension plans, past research into the impact of Social Security on retirement timing may not be extendable to teachers.…”

“…4 Gustman et al (2014) estimate that about 3.5 percent of households in the HRS are affected by either the WEP or the GPO. These programs impact the joint retirement decisions of households and apply to a substantial proportion of teachers (Diamond and Orszag, 2003;Haltzel, 2004;Kilgour, 2009;Gustman et al, 2013). When considering the implications of extending Social Security coverage to public sector workers, it is important to not only consider the impacts on Social Security solvency, but also how structural changes in public sector workers' retirement incentives will change their own and their spouses' labor supply decisions.…”