Re Teachers and Social Security....Below is an article that might be of interest....I had thought EVERYONE working had to pay into the SS system.....WHAT other groups are exempt????
Are public teachers everywhere exempt from paying into Social Security? If not, do they get their retirement funds as well as Social Security payments, even if they never paid into the system?
What are the interest rates on the money that teachers get on the funds they pay into their retirement fund pensions?
Shouldn't the citizens who pay into Social Security receive something like the same interest that government workers and teachers receive in their retirement funds?
Teachers preserve loophole
MONEY TALK
dallasnews.com
03/10/2003
By PAMELA YIP / The Dallas Morning News
Texas teachers have been re-energized by the defeat of a proposed law that would have deprived them of Social Security benefits they say are rightfully theirs.
Last week, the teachers gathered enough supporters to dissuade Congress from passing a bill that would have closed a loophole that lets them change jobs for one day in order to collect both Social Security and a teacher's pension.
The Social Security Protection Act of 2003 by Rep. E. Clay Shaw Jr., R-Fla., would have cut off a method that enables teachers and other public employees to circumvent a rule that prevents them from collecting Social Security benefits.
GPO quirk
The controversy centers on the so-called "government pension offset," or GPO, a quirk in the Social Security law that concerns public employees, especially teachers.
The issue is a passionate one for teachers because it goes to the heart of their livelihood. Every time I write about the GPO, I'm inundated with e-mails and phone calls from teachers and other public employees who say the law is ripping them off of Social Security benefits they've earned.
The GPO is aimed at making benefits more equitable across the board between those who have paid Social Security taxes and those who have not.
According to Social Security rules, if a person works for a federal, state or local government that is exempt from paying Social Security taxes, the pension the person receives from that agency will reduce – and possibly eliminate – benefits received from Social Security.
The pension offset also applies to the Social Security benefits a public employee would receive through his or her spouse.
Teachers say this is unfair because many of them worked in private-sector jobs to supplement their teaching income, and they paid Social Security taxes at those jobs.
"At a time when we're desperate for teachers, I don't know why we wouldn't want them to have a good retirement situation," said Aimee Bolender, president of Alliance/American Federation of Teachers, which represents teachers in the Dallas Independent School District.
Switching jobs
Exempt from the GPO are state, local or military-service employees whose government pension is based on a job where he or she was paying Social Security taxes on the last day of employment.
So some who work for school districts that don't withhold Social Security taxes are resigning and going to work for one day for a district that pays into both Social Security and the teacher retirement system.
That maneuver makes them eligible to receive full spousal benefits from Social Security, as well as teacher benefits.
That's not right, as far as Mr. Shaw is concerned.
"It gives people who haven't been part of the Social Security system a better break than those who have, and that's not fair," he said. "All we're doing is leveling the playing field."
Mr. Shaw's bill, which he hopes to resurrect, would require state and local workers to work their last five years in jobs that pay into the Social Security system in order to be exempt from the GPO.
For backers of teachers, the fairness sword cuts both ways.
"It is simply unacceptable to ask Americans to perform the most vital services in our nation and reduce their retirement benefits in the process," said Rep. Howard P. "Buck" McKeon, R-Calif., who's co-authored a competing bill that would repeal the GPO altogether.
And Another:
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latimes.com
ENTERING & LIVING IN RETIREMENT
Ex-Teacher Finds Social Security a Maze
By KATHY M. KRISTOF
Times Staff Writer
About two years before Adrienne Broadwater planned to retire from her teaching job and join private industry, she got a horrible shock.
A neighbor, also a teacher, told her that Social Security imposed an "offset" that reduced--and often eliminated--Social Security benefits for schoolteachers. If Broadwater was hoping to generate a Social Security pension in addition to her teacher's pension, she might as well forget it, the friend advised.
A call to the Social Security Administration confirmed it. Because Broadwater's government pension was likely to be substantial, the so-called "government pension offset" would probably eliminate her ability to claim Social Security, the representative said.
Broadwater was about to shelve her post-retirement plans, which involved getting a job with a computer company, when she discovered both her friend and the Social Security representative were wrong.
If she works in private industry for 20 years, as she plans to, she will indeed qualify for and receive Social Security retirement benefits. She just won't receive quite as much as if she had never worked for a government entity.
In the byzantine realm of Social Security rules and regulations, it's understandable that errors are made. Indeed, an expert on government pension rules told a reporter: "If you get this right, send in an application. We'd like to hire you."
Workers employed by entities that do not pay into the Social Security system--this applies to about 20% of the nation's teachers and state and local employees as well as most longtime federal government and railroad workers--are affected by two special provisions in the Social Security law.
One, called the windfall elimination provision, affects people who work in both private industry and government--as Broadwater was planning. It reduces, but never eliminates, the Social Security retirement benefits earned.
The other provision, called the government pension offset, is applied against spousal and widow or widower benefits claimed by former government workers. The government pension offset can eliminate your ability to claim either spousal or widow(er) benefits on your spouse's record.
These rules--passed as part of a 1986 reform of the Social Security system--are aimed at counterbalancing the windfall that government employees once received from Social Security's income-weighted formula. To understand how and why this works, you need to be familiar with how the Social Security benefit formula is computed.
The formula is aimed at paying low-wage earners a greater percentage of their working income than relatively higher-paid workers. That's because the framers of the law believed that higher-paid employees could save more of their wages for retirement. Low-wage earners were likely to have less money to save and therefore needed Social Security's safety net more.
As a result, Social Security pays 90% of a worker's first $531 in average monthly earnings; 32% of the next $2,671 in average monthly earnings; and 15% of any amount over that.
So if you earned an average monthly wage during your working career of $1,500, you'd get $787.98 in Social Security payments each month. (Multiply $531 by 90% and you get $477.90. Multiply $969 [the amount above $531] by 32% and you get $310.08. The sum of those two figures is $787.98.) In this case, Social Security would replace 52% of your working wages.
On the other hand, if your average monthly wage was $5,000 when working, Social Security would replace a maximum of $1,602.31, or 32% of your wages, according to this formula. The figure could be even less, because Social Security also imposes caps on the maximum monthly benefits it will pay in a given year.
How is your average monthly wage calculated? The agency looks at your full work history and totals the amounts you earned during your 35 highest-paid years. If you didn't work all 35 years--or if you worked in a government job where Social Security taxes were not deducted--the agency would add in zero-earnings years to make up for the ones in which you didn't report wages subject to Social Security tax. The result: If you work in private industry for 20 years and in a government job for 20 years, you could earn a lot and still appear to be a low-paid worker in the Social Security calculation.
Consider a hypothetical government worker, whom we will call Carrie Lee. Lee worked as a bank executive earning $50,000 per year, or $4,167 per month, for 10 years. At age 40, she had a midlife crisis and decided banking was meaningless. She became a schoolteacher, where she taught economics and earned a respectable $35,000 annually.
However, because her school district was part of the California State Teachers' Retirement System, she didn't pay into Social Security during her government tenure. Instead, both she and the district paid into a teachers retirement system.
For Social Security purposes, Lee appears to have worked just 10 years at an average monthly wage of $4,167. Since 35 years need to go into the formula, 25 years worth of zeros are added. Her average monthly wage drops to $1,191, which makes her appear to be a low-wage earner who qualified for a relatively high Social Security replacement rate. However, because those zero earnings years in the Social Security calculation weren't really from non-working years--instead they were from years when Lee earned a state pension--Congress determined this amount was unjustifiably generous. In other words, she wasn't really the kind of low-wage worker that was intended to benefit from the formula.
To solve this apparent inequity, Congress created that so-called windfall elimination provision. What it does is subject your first dollars of earnings to a different Social Security formula that gives you a lower payback for the first dollars earned.
Instead of getting 90% of the first $531 in average monthly wages, for example, Lee would get 40%. In the end, her monthly Social Security benefit would work out to $423.40, versus $689 if she were not subject to the windfall elimination rule.
What if Lee didn't have enough periods of work to qualify for Social Security on her own record? If she had a long-term marriage to a spouse who was covered by Social Security, she could apply for benefits on her spouse's record.
However, here she faces a bigger hurdle, called the government pension offset. Simply put, she can receive only the amount of monthly Social Security benefits that exceed two-thirds of her government pension. This can eliminate spouse and widow (or widower) benefits completely.
More information about the windfall provisions and the government pension offset can be found at the Social Security Web site at ssa.gov. Or you can call the Social Security Administration at (800) 772-1213. Or you may want to check out a book called the "Mercer Guide to Social Security and Medicare." The guide, which retails for $9.95, not only clearly explains how the system works, but it provides a host of charts and work sheets so you can calculate your benefits on your own. The book is available in bookstores and libraries.
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And This from Texas...
tomdelay.com
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This from the SS Adm...
ssa.gov
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And this from CA...2003 letter to Daily Press
vvdailypress.com
>>>>>>>>>> I don't pay into CALPERS, and teachers do not pay into Social Security. So, explain to me, why support Davis when he gave you Social Security for free? Should I petition Governor-Elect Schwarzenegger for CALPERS benefits for free?
Not that teachers don't deserve a good retirement, but so do any other working class Californians. Intelligent working class Californians who set aside extra money for their retirement when they know that Social Security will not be enough. These working class people do not "beg" for money that is not theirs. My point here is that, if you want to steal Social Security from us, then we should be able to steal CALPERS from you <<<<<<<<<<< |
