We often hear from Colorado PERA members who want to know if legislators have made any progress in their efforts to change two provisions of federal law that can reduce retirees’ Social Security benefits.
Because most PERA members do not participate in Social Security while working for a PERA employer, any Social Security benefit they earned from private-sector work may be affected by the Windfall Elimination Provision (WEP) or the Government Pension Offset (GPO).
Those provisions have been part of federal law since the 1980s, but lawmakers in recent years have repeatedly sought to modify or repeal them without success.
Why WEP and GPO exist
Social Security benefits are designed to replace only some of a worker’s pre-retirement earnings, and lower-paid workers receive a larger replacement percentage than higher-paid workers. Prior to the WEP being enacted in 1983, non-Social Security government workers like PERA members would receive a larger-than-intended Social Security benefit because of those years in their earning record when they weren’t contributing to Social Security. The WEP was meant to remove that advantage.
The GPO applies to PERA retirees who also receive a Social Security spousal or widow(er) benefit and reduces the Social Security benefit by two-thirds of the PERA benefit. That’s because spousal and widow(er) benefits are considered “dependent” benefits and were meant to help spouses who stayed at home and depended on their working partner for financial support. According to the Social Security Administration, now that it is common for both spouses to work, the GPO requires the “dependent” benefit to be offset by the dollar amount of their own retirement benefit.
It’s important to note that a retiree’s PERA benefit will never be reduced to Social Security or other benefits. Learn more about PERA and Social Security.
Where things stand
While federal lawmakers have introduced about a half-dozen bills this Congress that touch on the WEP and GPO issue, the one that has received the most attention and support is H.R. 82, the Social Security Fairness Act of 2023. Its counterpart in the Senate is S. 597. Both bills were introduced in early 2023.
Other bills that seek to modify or repeal WEP and/or GPO include H.R. 4583 and S. 2280—both known as the Social Security 2100 Act—which propose a number of changes to Social Security, including temporarily eliminating WEP and GPO. Those bills were introduced in July 2023.
In April 2024, the House Ways and Means Committee convened for an informational hearing on the topic of WEP and GPO. The meeting didn’t result in any action on the above bills, but lawmakers heard from a panel of experts on the effects the two provisions have on retired public employees and the potential impacts of any changes to Social Security. Testimony largely centered around the fact that the Social Security Administration now has better worker data and WEP/GPO formulas could potentially be updated, but the cost to make any changes would amount to billions of dollars over the next decade.
Neither Social Security Fairness Act bill has made forward progress in Congress, but they continue to gather support—H.R. 82 in particular has gained more than 300 cosponsors in the House. And in May, the bipartisan Problem Solvers Caucus threw its support behind the Social Security Fairness Act with its 62 members endorsing the legislation.
What’s next?
We can expect congressional lawmakers to continue discussing this issue. Even if none of the above bills see any meaningful action before the current Congress ends, legislators are likely to introduce new bills in the next Congress.
As we’ve seen repeatedly over the years, bills that seek to modify or repeal WEP and/or GPO face a steep uphill battle, with lawmakers often citing the cost of increased Social Security benefits as a significant hurdle to overcome. That’s especially true in the face of pessimistic forecasts of Social Security’s finances.
While the most recent projections are somewhat better than expected, Social Security’s cash reserves are still expected to be depleted in about a decade. If that happens and Congress hasn’t taken any action, Social Security will be forced to begin reducing benefits, but experts expect lawmakers will take action to shore up the system’s finances before any benefit reductions are necessary. It’s possible that a package of reforms for Social Security could also include some changes to the WEP and GPO, but only time will tell.
One of the most effective forms of advocacy is for PERA members and retirees to contact their senators and representatives in Congress to let them know how the WEP and GPO affect them, as this issue is will be decided at the federal level.
We’ll continue to monitor this issue and post any updates on PERA On The Issues when we can. To stay in the loop, be sure to subscribe to our biweekly newsletter.
