- The Washington Times - Tuesday, March 25, 2003

By the end of this year, 65,000 retired federal and state workers, and former schoolteachers will have learned a tough lesson: The Social Security checks they had been expecting either will be canceled, or, if they are "lucky," only reduced about $300 per month.

The stunned retirees will join the ranks of 820,000 ex-public employees who have already learned the hard way that the Social Security benefit they expected, and had been told they would get, will be reduced or eliminated.

Reason: Two laws called "windfall" and "offset" that reduce or eliminate Social Security benefits of people who get public pensions and who also worked briefly (often just long enough to qualify) under Social Security.

Groups representing feds have tried for years to get Congress to modify or repeal the windfall and offset laws. They've laid important groundwork, but only after organized groups of teachers joined the fray and persuaded the California and New York congressional delegations to get into the act.

Last week, the National Association of Retired Federal Employees (based in Alexandria) had its legislative conference and sent delegates to Capitol Hill. Mostly they lobbied for changes in the windfall and offset formulas, and to give retirees the same option to pay health insurance premiums with pretax dollars. That would cut their typical tax bill $434 per year.

Two years ago the goal was to modify the windfall and offset formulas to let retired feds keep some of the Social Security due them. Now the emphasis is on bills to repeal the formulas, allowing the retirees to keep all the benefits.

Legislation to repeal both has 13 co-sponsors in the Senate and 154 co-sponsors in the House. Democrats outnumber Republicans as co-sponsors, but the gap is narrowing.

The typical federal "windfall" victim gets a civil service benefit based on his or her time in government and their highest three-year-average salary. About half the retirees also have enough time (typically 10 years) under covered Social Security employment to qualify for some kind of Social Security payment.

But it won't be what they expected because the windfall formula reduces that benefit in stages for anyone with less than 30 years of fully covered Social Security employment.

The typical federal "offset" victim is a civil service (or public service) retiree who didn't have any Social Security coverage, but who expected to get a spousal or survivor benefit based on her husband's Social Security coverage. The offset formula reduces, and often, wipes out the Social Security benefit in this case.

Delayed pay raise

Most federal workers understand that the White House has been focused and busy in recent days. But that doesn't stop them from asking about their delayed 1 percentage point pay raise. Relax, the delay doesn't change anything. Here's the situation:

Congress passed legislation raising the civilian federal pay raise from 3.1 percent to 4.1 percent. That covers white-collar feds, but not postal workers or wage board (blue-collar) feds. President Bush signed the bill into law.

The only issue is whether to apply the extra raise to locality pay (which would benefit feds in the Washington-Baltimore area) or to apply it across the board. That would mean a flat 4.1 percent raise for all feds, whether in high- or low-wage cities.

The delay doesn't have any effect on feds. The raise will be retroactive to the first pay period (beginning on or after) Jan. 1. And it will count toward the employees high-three-year-average salary, for retirement purposes. The delay, while inconvenient, isn't a big deal all things considered.

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