Federal legislative update
The Windfall Elimination Provision (WEP) and Government Pension Offset (GPO): Bills filed to repeal both, but passage unlikely
October 9, 2013
In April 2013, a bill was filed in the United States House of Representatives to repeal the Government Pension Offset (GPO) and the Windfall Elimination Provisions (WEP). The bill, the Social Security Fairness Act of 2013 (H.R. 1795) was filed by Congressman Rodney Davis of Illinois and has 85 co-sponsors as of July 31, 2013. The number of co-sponsors is significantly less than in previous sessions, when over 300 members of Congress had signed on as co-sponsors. A companion bill, S. 896, was also filed in the Senate by Mark Begich of Alabama.
The prospect for passage remains remote due to the ongoing deficit discussions in Washington. As we have noted in the past, the cost associated with repealing these provisions has been estimated at over $80 billion over the next ten years. Please visit H.R. 1795 and S. 896 for more information.
For more information on Massachusetts bills: To learn about proposed legislation that could affect the MTRS and its members, you can obtain the text of any Senate or House Bills through the General Court’s website.
A warning about pending legislation: In simple terms, a bill is an idea that has been presented to the state Legislature for possible action. The process is complicated, and it does not always lead to enactment of the bill. The MTRS urges caution in making retirement plans based on pending legislation because bills:
- must pass both houses and be signed by the Governor to become law,
- may be amended,
- may not pass,
- may take years to pass, and
- may never become law.
For information on how bills become law, please see Lawmaking in Massachusetts.
This legislation would allow members to purchase up to 4 years of creditable service for any periods teaching at a nonpublic school.
H2366: An Act Relative to Cost of Living Adjustments for Retired Public Employees of the Commonwealth
The legislation would increase the COLA base from $12,000 to $16,000 upon its passage and index future COLA base increases to a percentage of the maximum Social Security benefit over the course of the next 16 years. The current maximum Social Security benefit is just over $25,000 and it increases every year by the increase in the Consumer Price Index (CPI).
In addition, the legislation provides that the COLA would be the CPI or 3%, whichever is greater (currently, it is the CPI or 3%, whichever is less). Finally, the bill would extend the pension funding schedule from 2023 to 2040.
This legislation would allow a school administrator to purchase up to 3 years of service for any period or periods of work experience in the business field.
This legislation would increase the benefits, by a stated dollar amount, paid to retirees who retired prior to July 1, 2004 and selected either Option B or Option C.
This legislation would specifically include school nurses under the definition of teacher. School nurses who are certified by ESE are members of the teachers' retirement system. The MTRS began accepting certified school nurses in 1996.
This legislation would require a member who is reinstated to service after having been out on disability to purchase the period of time he was receiving his disability benefit, plus interest, in order to have his pension recalculated using the period he was receiving his disability benefit. Currently, the statute does not require the reinstated member to purchase that period of service when they return to work. That period, however, is currently included in any subsequent retirement calculation.