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Public Servant Retirement Protection Act filed

As previously reported, Representatives Brady (R-TX), Shaw (R-FL), McKeon (R-CA), Berman (D-CA), Michaud (D-ME) and Sam Johnson (R-TX) introduced a bipartisan bill (the Public Servant Retirement Protection Act) to begin addressing the problem of the Windfall Elimination Provision. Sen. Kay Bailey Hutchison introduced the companion bill in the Senate. The House bill is H.R. 4391, the Senate bill is S. 2455.

Why Does NEA Support the Brady/Hutchison Proposal?
NEA supports the new proposal as a FIRST STEP toward full repeal of both the GPO and the WEP. Our letter to Congress and our discussions with hill staff have been explicit on this point.

NEA has been engaged in tough negotiations with Chairman Shaw to move legislation addressing the WEP and GPO out of committee. Attempts to go around the Chairman (such as with a discharge petition) have not succeeded and may only result in a loss of bipartisan support. Although the discharge petition currently has two-thirds of the signatures needed, no Republicans have signed what they consider to be a partisan and political maneuver opposed by their leadership. Even Republicans who would vote for H.R. 594 on the floor will not sign the petition.

While the proposed bill does not fully address the problems with WEP or deal with the GPO, it is a positive first step. In fact, the sponsors of the full repeal legislation (Representatives McKeon and Berman) are also original sponsors of this new proposal.

What Are the Next Steps?
Sponsors of the proposal have indicated they intend to hold a hearing and a committee mark-up is possible. As a result, this proposal could pass this year. As with any legislation, there will opportunity to comment and propose amendments. NEA will be working with Congress to ensure that the legislation meets the needs of NEA members. If committee hearings reveal the bill's drawbacks outweigh its benefits, NEA will withdraw its support. In addition, NEA will be monitoring and weighing in on how Congress will pay the bill's estimated $7.7 billion cost (over ten years). Any proposal that would pay for the changes through further enforcement of the offsets will be unacceptable to NEA.

Clarification: How Would the Proposal Work?
As reported earlier, the Brady proposal would change the formula for calculating Social Security benefits for individuals who have income both from covered and non-covered employment.

NEA has received the following additional clarifications from Congress in response to questions from NEA members.

• The bill contains a provision that says current retirees or those who have already had some work outside of Social Security (whether or not they are retired), will get the higher of their current benefit or the benefit as calculated under the bill.
• The calculation would use the highest 35 years of earnings (or possibly a lesser number of years if the person was disabled), which is what Social Security uses in the normal benefit calculation.
• The calculation would use "indexed" monthly earnings (which inflates earnings from long ago to reflect wage growth that has occurred since then), just as SSA does in the normal benefit calculation. For info on how earnings are indexed, see http://www.ssa.gov/OACT/ProgData/retirebenefit1.html.
• The percent of the benefit paid is not determined using years in or out of Social Security, but by using average indexed monthly earnings (again, we are talking about earnings over the highest 35 years).

Sponsors are working on a template to help individuals figure out how the new proposal will impact their benefits. This template will be posted on the NEA Web site as soon as it becomes available.

Examples of how the proposal works are posted on the NEA Web site at http://www.nea.org/lac/socsec/latestnews.html#newwep

Stay Up-To-Date! The latest GPO/WEP news is posted on NEA's Legislative Action Center at http://www.nea.org/lac/socsec. Click on "latest news."