The repeal of the WEP/GPO. Should I be grateful?
I had a doctor’s appointment the day after Christmas way up on 102nd street and 5th Avenue.
Anne came with me and we decided that rather than take the 6 train back we would hop a bus on 5th and enjoy the view of Central Park, get off at Rockefeller Center and fight the crowds to have lunch.
Which we did.
It was all pretty festive. The Rockefeller Center tree was still up and the crowds were thick with tourists, foreign and domestic.
Back home I checked my messages and I’m still getting questions regarding the surprise action by the U.S. Senate to repeal the WPA/GPO.
Those two laws were responsible for diminishing the Social Security benefits I rightly earned over the two decades I paid into it before I became a teacher.
The repeal had been introduced in the House every session for years, but never brought to the floor for a vote.
Which the Democrats had ample opportunity to do.
Why now? I’ve asked that question many times over the past few days and never have I received a good answer.
The repeal now sits on President Biden’s desk waiting for his signature, which I have no doubt it will get.
Mark Miller provides some background to the repeal in his Substack column Retirement Revised, which I recommend subscribing to.
Social Security’s benefit formula is progressive - workers with low average lifetime earnings get a higher benefit amount compared with their earnings than people who are better paid. In this system, workers affected by the WEP look as though they earned less over the span of their careers than they actually did - so their unadjusted benefit would be larger than they otherwise would. The WEP aims to eliminate the high benefit return these workers get on their Social Security income when they are not really low-income.
Social Security expresses your benefit as a Primary Insurance Amount (PIA). This amount is derived by calculating your Average Indexed Monthly Earnings (AIME) - your top 35 years of earnings before age 60 are averaged and then indexed to put them on more of a proper comparative basis with the earnings level in our society as of the year you turned 60. That is done using the average wage indexing series that the Social Security Administration computes every year.
Then, your PIA is calculated. This is a weighted formula that gives a higher benefit relative to career earnings for a lower earner than for a high earner. Workers receive 90% of AIME for the first segment of the PIA (which is also referred to as a bend point). They receive 32% of the amount in the second bend point, and 15% in the third.
But the PIA formula does not distinguish between workers who had low wages and those who worked for part of their careers in jobs not covered by Social Security. And because AIME considers the 35 top years of earnings, people impacted by the WEP look like they are low wage earners.
Some of my retired teacher friends have asked it we will receive all the back payments from Social Security that they would have received if not for the WEP/GPO.
We will not.
From what I understand, we will only get pack payments to January 1st, 2024.
So, if you are someone like me who made payments into the Social Security fund for decades, that money will remain gone.
Should I be grateful that at 76 years of age I will finally start getting what I earned?
Not really.