BILL ANALYSIS
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THIRD READING
Bill No: AJR 10
Author: Torlakson (D), et al
Amended: 5/18/09 in Assembly
Vote: 21
SENATE PUBLIC EMP. & RET. COMMITTEE : 5-0, 6/22/09
AYES: Correa, Benoit, Liu, Padilla, Wiggins
NO VOTE RECORDED: Ashburn, Ducheny
SUBJECT : Social Security
SOURCE : California Federation of Teachers
California Retired Teachers Association
California Teachers Association
DIGEST : This resolution requests the President and the
Congress of the United States to enact the Social Security
Fairness Act of 2009, which repeals the Government Pension
Offset (GPO) and the Windfall Elimination Provision (WEP)
from the Social Security Act that applies to teachers and
other public employees in the state.
ANALYSIS : Existing federal law contains the Social
Security Act which includes two offsets, the GPO and the
WEP that reduce Social Security benefits payable to persons
who are entitled to benefits under other public retirement
systems. The GPO provides that the Social Security
benefits a person is receiving as a spouse or surviving
spouse are reduced by two-thirds the amount of any
government pension the person receives based on his or her
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own work in Federal, State or local government employment
not covered by Social Security. The WEP reduces the Social
Security benefits of a retired or disabled worker and the
benefits of the worker's family if the worker also receives
a pension based in whole, or in part, on his or her own
earnings based on noncovered employment.
Comments
Social Security provides benefits to retired workers and
under certain circumstances, their spouses, former spouses,
surviving spouses and surviving former spouses. When
Social Security was originally established in 1935, state
and local governments and their employees were prohibited
from participating. Over the years, federal laws were
passed allowing these employees the opportunity to elect to
join the program and many California jurisdictions joined,
including the State of California, except for the
California Highway Patrol, firefighters and correctional
officers. Other California public employees not
participating in Social Security include teachers, more
than 450 cities, counties and special districts, judges,
and those working for the University of California.
Nationwide, more than a third of all teachers are not
covered under Social Security. A majority of these
teachers will be subject to either the GPO or WEP, or in
some cases, both. The application of these provisions can
have a severe impact on the financial security of these
retirees.
According to the author's office, "The WEP and GPO
provisions of the Social Security Act penalize individuals
who move from private sector employment to teaching, public
safety, and other careers in public service and vice versa.
California has a significant teacher shortage and requires
more than 16,000 new teachers per year to meet enrollment
growth needs, retirement replacement, as well as class size
reduction in targeted schools. The penalty hamstrings the
state's ability to recruit experienced professionals to
enter the teaching profession, as they would lose their
social security benefits if they changed careers."
Prior Legislation
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Numerous other resolutions have been adopted by the
legislature in the past to encourage Congress and the
President to eliminate, or limit the application of, the
Social Security offsets. These include: AJR 5
(Hernandez), Resolution Chapter 116, Statutes of 2007; SJR
15 (Dutton), Resolution Chapter 62, Statutes of 2006; AJR
29 (Pavely), Resolution Chapter 65, Statutes of 2003; AJR 3
(Leonard), Resolution Chapter 66, Statutes of 2001; and,
SJR 4 (Soto), Resolution Chapter 94, Statutes of 2001.
FISCAL EFFECT : Fiscal Com.: No
SUPPORT : (Verified 7/14/09)
California Federation of Teachers (co-source)
California Retired Teachers Association (co-source)
California Teachers Association (co-source)
American Federation of State, County and Municipal
Employees
American Federation of State, County and Municipal
Employees, Local 685
Association for Los Angeles Deputy Sheriffs
Association of California School Administrators
California Professional Firefighters
California School Boards Association
California School Employees Association
CalSTRS
Community College League of California
Faculty Association of California Community Colleges
Glendale City Employees Association
Los Angeles County Probation Officers' Union
Los Angeles County Sheriff Lee Baca
Los Angeles Police Protective League
Orange County Employees Association
Orange County Professional Firefighters Association
Organization of SMUD Employees
Peace Officers Research Association
Retired Public Employees Association
Riverside Sheriffs' Association
San Bernardino Public Employees Association
San Luis Obispo County Employees Association
Santa Rosa City Employees Association
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ARGUMENTS IN SUPPORT : The Community College League of
California states that, "The federal government established
special rules for Social Security (SS) benefits that
disadvantage certain public employees including community
college employees that participate in the California State
Teachers Retirement System (CalSTRS). These rules include
both the Government Pension Offset (GPO) and Windfall
Elimination Provisions (WEP). Under the GPO rules of
federal law, the SS benefits of a retired educator's spouse
or surviving spouse benefits are reduced by two-thirds.
The WEP affects educators who not earn SS from their jobs
in public education, but who at one time also worked in
jobs in which they earned SS benefits. The WEP causes
certain public employees, who at one time were outside the
SS system, including teachers, to lose as much as 60
percent of the SS benefits to which they are entitled.
"The WEP and GPO provisions of the Social Security Act
(SSA) penalize individuals who move from private sector
employment to teaching, public safety, and other careers in
public services and vice versa. The League believes that
GPO and WEP dramatically affect the ability of our colleges
to recruit faculty members, especially for career-technical
education, who fear the loss of their SS benefits. Many of
the career-technical teacher candidates with specialty
skills are recruited from private industry, small business,
health care fields."
DLW:nl 7/14/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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