The Senate advanced legislation that will cost hundreds of billions of dollars by eliminating what is called the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). It’s a double-edged sword for Alaska unions and Democrats (and some Republicans) in the Alaska House and Senate.
Many public-sector workers’ Social Security payments are drastically reduced because of the WEP and GPO. If they get a pension or defined benefit, their Social Security payment gets a big haircut, although this financial penalty only impacts a portion of public sector retirees who meet certain requirements in terms of longevity of public service.
Sen. Lisa Murkowski has co-sponsored legislation repeatedly since she was appointed to the Senate to end the penalties that impact Alaska public workers more than any in the country. She celebrated the victory Friday, while highlighting the massive support from union leaders in Alaska:
“I have been working on the Social Security Fairness Act for as long as I’ve been representing Alaska in the United States Senate,” Murkowski said. “There is no doubt that Congress has taken too long to address this inequity, but I am grateful to the diligent bipartisan work of my colleagues to help us finally get this over the finish line. This legislation takes care of Alaskans who have dedicated years of service to our communities, serving in integral roles such as teachers, firefighters, and police officers. Hardworking public servants should not be denied the benefits that they paid for because of their career choices, and I’m relieved that this longstanding injustice has been remedied.”
Unintended consequence – defined benefits for state workers
The new law will invalidate one of the most often-repeated arguments that unions and Democrats in Alaska are making to return defined benefits to certain employees in the state. They have said that defined benefits are necessary because of the federal Windfall Elimination Provision and Government Pension Offset.
Defined benefits for state workers is expected to be front-and-center in the coming Alaska Legislature, which is controlled by Democrats and union-aligned Republicans.
In fact, many of the same people fighting for a return to state defined benefits in Alaska were quoted in Murkowski’s press release:
Joelle Hall, president of Alaska AFL-CIO: “The Alaska AFL-CIO and all of its affiliated unions are elated with the passage of the Social Security Fairness Act. The GPO/ WEP provisions have existed for far too long impacting the lives of thousands of Alaska workers and their heirs. Punishing public employees and their heirs for dedicating their lives to their community is wrong and we want to thank Senator Murkowski for her long-standing support for fixing this policy that has hurt so many families.”
Heidi Drygas, executive director of ASEA/AFSCME Local 52: “Today’s vote is incredibly welcome news to thousands of Alaska’s current and former public employees who have been unfairly punished simply for their public service. We thank Senator Murkowski for her leadership on this critically important issue for our membership. So many Alaska families will breathe easier tonight knowing they will receive the full retirement that they deserve. Thank you to the thousands of AFSCME employees and retirees for their decades of persistent advocacy on this issue.”
Sean Kuzakin, president of Public Safety Employees Association Local 803: “Alaska’s law enforcement personnel have worked too hard and put too much on the line in service of our communities to not receive their fully deserved Social Security benefits. I’m relieved that this long-standing injustice has been corrected and grateful to Senator Murkowski for her support for Alaska’s public safety employees.”
Dominic Lozano, president of Alaska Professional Fire Fighters: “Alaska’s firefighters applaud Senator Murkowski for standing up for public workers across Alaska,. For too long the federal government has been withholding portions of our social security benefits unfairly. Senator Murkowski understands the importance of this legislation and has been advocating for Alaskans since she started in the Senate. Retirees throughout Alaska know the importance of this legislation as well as future generations of Alaskans who will now receive their full social security benefit.”
Kathy Simpler, director of National Education Association-Alaska: “Passage of H.R. 82 is historic and will immediately make a positive difference in the lives of thousands of former military members, public servants and educators. We’re grateful that Senator Murkowski has been fighting alongside Alaska’s educators on this issue for her entire career in the US Senate.”
Paul McIntosh, president, National Active and Retired Employees Association:“More than 17,000 former public servants in Alaska, and over 2.8 million nationally, are unfairly penalized by WEP and GPO. With this Senate vote, backed by Senator Murkowski, we will finally receive the full benefits we earned through our hard work. The National Active and Retired Federal Employees Association (NARFE) will be forever grateful for Senator Murkowski’s leadership in the effort to repeal WEP and GPO, which NARFE has been advocating for 40 years.”
None of the Alaska union leaders mentioned that they will now drop their push for the costly defined benefits for State of Alaska employees, pensions that would impact city, borough, and school district employees across Alaska.
The State of Alaska still owes at least $6 billion to the former defined-benefit recipients who were enrolled in the program before it was discontinued in 2006 and replaced with a defined-contribution system, similar to what is found in the private sector.
More details
The WEP was enacted in 1983. It trims or drastically cuts Social Security benefits of workers who receive pensions from a federal, state, or local government for employment not covered by Social Security.
Alaska, a state that has a massive government workforce, has thousands of retirees impacted by the provision.
Likewise, the GPO, which was enacted in 1977, reduces Social Security benefits for spouses, widows, and widowers whose spouses receive pensions from a federal, state, or local government.
Together, these provisions reduce Social Security benefits for nearly 3 million American workers and retirees, Murkowski’s office said.
The bill had the support of all Democrats in the Senate, and 24 Republicans, including Murkowski, Sen. Dan Sullivan, and Vice President-elect Sen. JD Vance.
The bill now heads to the desk of President Joe Biden, who is expected to sign it. It will cost nearly $200 million over a decade and will increase the risk of Social Security being insolvent by the mid 2030s.
A very simple concept, if you pay into a retirement fund, you have a right to the $ after you retire. Kudos to Senator Murkowski.
Fringe benefits such as free tax payer funded retirement and health care on top of high wages should not be doled out to government retirees because small business without fringe benefits have to rely on only one source of funding, social security.
Summarize; Government employee’s are not better than small business owners who have only the free market for earning or in some cases loosing money. Small business provides food, shelter, medicine in which civilization can survive.
Example; The farmer and rancher came before the sheriff, deputy and mayor in every town in the USA.
Also, public unions take the work out of Government employment.
More government social welfare for government employees and teachers unions.
Of course, at the expense of private sector payers who have to plan out their retirement using their brains and common sense. This is nothing more than legislation that robs Peter to pay Paul. Lisa Murkowski socialism on full display. Thanks, Frank Murkowski, for putting a hard line Democrat into the US Senate. The real hard private-sector workers of America pulling up the lazy government employees.
State of Alaska retirees in the Defined Benefits retirement plan do NOT get free tax payer funded retirement and health care. They make contributions for both retirement & medical benefits during their working years; in effect they prepay their own retirements and benefits. This money, plus the State’s legally required contribution, is placed in a trust and invested by the ARMB (Alaska Retirement Management Board) and the contributions plus return on investment is what funds their pensions and medical plan.
More than 50% of all PERS retirees have a take home pension check of $1,800 or LESS, and all TRS (teachers) retirees have a take home pension check of $2,400 or less. The high salary across the board concept is unfortunate because it is not true.
Sharon Hoffbeck
President
RPEAlaskaCare Consultants
A Retiree Organization
Former President
Retired Public Employees of Alaska
I have a SS bill.
1 only American citizens can get their money from SS.
2 no borrowing or giving any SS money to anybody that is not retired or any thing politicians dream up.
Serious question Sharon. How does the State of Alaska wind up with a multibillion dollar depict in the PERS/TERS retirement fund?
Sharon,
You said it……..”The State’s Contribution.” So, how is that not socialism? Private sector employees contribute out of their own hard earned funds. The “state” does not contribute to their retirement. Private sector employees contribute to the state’s system through various taxes and through a loss of benefits that only you state employees receive. A “defined” benefit is something everybody wants, but only the government employees and teacher’s unions
get from Democrat leaders like Lisa Murkowski. Little wonder why you whiners love Lisa Murkowski. She’s a socialist just like you ……..until all the other people’s money runs dry and there is nothing left for you whiners. Grow up!
Us private sector small business folks have no union but at the same time, the tax payer dollars help fund your unions, healthcare, retirement though in a round about way, plus you have the courts and government in your pockets to boot and I might add, government employees do not have to perform hard labor without breaks. NOT FARE!
The one thing that government workers, Democrats, socialists, and teachers unions don’t seem to understand is that …….
The government does NOT create wealth. They only ‘take’ wealth that was previously created in the private sector. Excluding the simplest fundamental law of economics, supply and demand, this is the next most fundamental law of economics.
Why in the ? h*ll should the gov give the dollars I earned to those who chose to not work hard and plan for retirement like many of us did. I contributed to SS for 24 yrs, afterwards, the State (Troopers) for 20. I received a letter from SS advising I will only receive a little more than 1/4 of what I was eligible for, because they were going to give it to those who “need it more than you.”!
Actually, they should pay us for all the years they stole from us.
Now you get it both don’t you? 2 retirements.
Yep! And I earned both of them and paid into both of them. For many years.
Good. You had 2 careers. Now 2 checks.
Here, here. Best comment.
👏👏
AST referring only to Capt. Lewis statement.
Where does the State’s SBS system that was set up to replace social security when employees opted out of social security fall in light of all this?
That’s a great question. What this HR 82, passed by the US Senate early this morning, does is fully pay people for the years they worked for employers who took from their pay and paid into the SS system dollars for SS (commonly private sector employers). Assuming people in the White House have Biden sign this, people retiring from public employment sign up for their SS benefits, and people who worked for public employers and are now receiving SS benefits (including their beneficiaries in many cases where the retiree has become deceased) will now have the entire years and dollars they paid into SS when not working for the public sector recognized.
The SBS, the 37.5 hour week, the dozen or more paid holidays, the average six weeks of paid vacation, the airline miles for employer paid travel, etc. are legacy bulwarks of the Alaska petroleum era. That era has all but ended but the huge state and municipal government built with oil dollars remains.
I won’t do so but someone will probably speculate that it’s only because Republican votes were needed for final passage that this legislation doesn’t exempt white people and heterosexual people from full benefit restoration.
Hi John-
The State withdrew from Social Security in the early 1980s, and offered employees the opportunity to start an SBS account, which is a defined contribution account. The State did not re-enter the Social Security program so the SBS system remains.
Many public employees worked under employers who paid into the Social Security system before or after their pubic employee service, and have met the 40 quarter Social Security requirement in order to receive a pension. Additionally, until the State withdrew from Social Security, State employees were covered under Social Security. So these folks paid into the Social Security System, met the requirements, and any pension they will receive once the Social Security Fairness Act goes into effect, is based on their years of service/salary in a Social Security covered job.
Many people these days have more than 1 pension; many people have a union pension plus receive a Social Security pension; many people have a private sector pension plus receive a Social Security pension. Someone who has a State of Alaska pension deserves the same rights that others have—to receive what they paid into.
Sharon Hoffbeck
President
RPEAlaskaCare Consultants
A Retiree Organization
Former President
Retired Publice Employees of Alaska
There are highlights, not often, to being a “Ancient”. I’ll make it before the end of the $$$!
The “Folks” are going to take a hit-
“After Lying That Trump Wants to Cut Social Security, Dems Rush Bill That Will Cut Benefits – Need Biden to Sign Before Trump Arrives’: ‘https://www.thegatewaypundit.com/2024/12/lying-trump-wants-cut-social-security-dems-rush/
Oh great double dipping on my “dime”!
Not really. They paid in on 2 retirement accounts. They now get 2 checks. What am I missing?
Thank you Greg!
Former state senator Dick Eliason is correct.
Socialists always want private sector workers to pay their benefits on their dime you don’t see private sector employees getting benefits or contributions from the lazy socialists who live off the public dime.
Greg; But the money was derived from the tax payer of which the private sector is the majority.
This is exactly the exemplar of reporting we Alaskans cannot expect and do not expect from any other news source! The incoming legislature next month will introduce defined benefit legislation, quite possibly the same legislation that passed the Alaska Senate in the outgoing legislature. A new DB tier is completely and utterly unaffordable at less than 500,000 barrels of oil and a Permanent Fund that is losing buying power (not keeping pace with Biden inflation), and it is entirely incompatible with our known economic future. Dreams of gas lines, huge data storage investments, billions of carbon storage dollars coming to the GF, and cruise ship tourism becoming year-round amount to fantasies but reverting to defined benefit for public employees would require cold, hard cash (as uniquely guaranteed by the state constitution).
So this action by Congress gets the state off a hook, real or perceived, of lacking an automatic and defined pension for state and municipal government employees. Even if this is now reported cogently, comprehensively and accurately by the Daily News, Juneau Empire, AK Beacon, and Public Radio (Don’t hold your breath.) it will only be because Must Read Alaska first identified this truly Alaska story.
Lisa Murkowski is the best Christmas gift that Democrats could ever imagine. She just keeps giving presents to the lefties, liberals, Democrats and union bosses. And yet, she claims she is in the Republican Party?
.
Little wonder why she needed a daddy-appointment, a last minute write-in effort, RCV,
full-on Democrat support, and daddy and mommy to stay quiet and hidden in Wrangell, in order to keep her job in DC.
.
Lisa Murkowski is a low level fraud, a very dishonest woman, a broken Catholic, a traitor to the political party that backed her for 20 years, a low IQ lawyer, and possibly the most hated woman to ever hold political office in Alaska.
Right on, Julia. Right on!
Lisa Murkowski is a government employee ……so whaddya you expect. Her daddy Frank was a government employee……so whaddya you expect. The entire Murkowski legacy is created by public sector funds. The ONLY private sector job Frank Murkowski ever had was in banking, and he ran that bank into the ground, along with lots of private money from investors. Government work. Good enough for the Murkowski clan and all of the government workers whom rely on them to retire early, fat, and sassy. Of course, Frank Murkowski himself gets US Senate AND State of Alaska retirement checks every month. So that qualifies the Murkowski legacy to remain as the most benefitted socialists in Alaska history. Another history making moment for the Murkowski’s. Brought to you by appointments, write-ins, and Rank Choice Voting.
Julia: I’m reasonably certain Lisa is more popular than quite a few other Alaskan politicians, including Sara Palin, Bill Walker and probably Mike Dunleavy.
It’s obvious you are not an admirer of Senator Murkowski. Everybody is entitled to their opinion in a democracy but you have admit Senator Murkowski has repeatedly been re-elected. Why is that if she’s so hated?
Is this going to be retroactive?
Hi Sue—
I just read an article saying it will be retroactive to 1/1/2024, but of course articles can sometimes be wrong!
If the article is accurate, those who retired before that will not receive the balance of the Social Security pension dollars that were taken from them prior to this bill going into effect. They deserve it—they paid into Social Security like anyone else who paid into Social Security, but they will not get what was taken from them.
Sharon Hoffbeck
President
RPEAlaskaCare Consultants
A Retiree Organization
Former president
Retired Public Employees of Alaska
It would be an interesting addition to the article to note that the Alaska legislature has unanimously passed resolutions for years asking for this change. 100% bipartisan support – few issues in our state have that.
“It will cost nearly $200 million over a decade and will increase the risk of Social Security being insolvent by the mid 2030s.” 200 million is a virtual drop in the bucket compared to just the billions poured into the bank account of Voloymiir Zelinskyyiiiyy over the last couple of years. Also, Social Security was insolvent the moment it was passed. You can look up newspaper articles from the 1930s making exactly that argument. It’s a government-run ponzi scheme, pushed by New Deal Socialist FDR. If a guy worked an average job and paid into SS for 20 years, starting at age 20, then for another 20 years lived as a homeless person, using various local and state social services, and now wants to “retire”, he can collect full social security benefits. Compare that to Capt. Lewis posting above who worked hard his whole life. He could very well end up getting less than the professional bum. But Capt. Lewis is the “double dipper”. Right….
You’re twisting. It depends on how many qualifying quarters the bum paid into, and the amount he paid in. Likely his check is smaller than the captains now that this passed.
Not a peep about paying for this, even if it is a benefit that should have been paid all along. If the benefit increase passes then a way to pay it without even more quickly bankrupting the system needs to be delineated. When this issue came up during the debate I believe the argument was, don’t worry about that issue until it becomes a concern. Paying for it will be way less popular than forking out the cash, as is the case throughout the federal government, hence the massive uncontrolled debt that only the feds can get away with. What a total hot mess!
Hi Dave,
“…benefit increase…” is not a clear and accurate description of the situation. Since the early 1980s when the WEP/GPO provisions were implemented, any public employee who received a pension, and also was eligible to receive a Social Security pension, was penalized by having their Social Security pension amount that they were entitled to, reduced by almost half. So the Social Security Fairness Act is not a benefit increase, it is a benefit restoration—there is a big difference between the two.
Sharon Hoffbeck
President
RPEAlaskaCare Consultants
A Retiree Organization
Former president
Retired Public Employees of Alaska
So a person retires military, then works for government (common here), when they are done w/ gov work they will be “triple dippers”?
Military retirement, State/Fed retirement & SS
Must be nice.
Could be
I knew a guy that got his railroad pension plus SS. Cha ching.
Hi George—
The term “triple dippers” is a very disrespectful way to describe those who put their lives on the line every day in order to protect this country—to protect you.
If one continues military service enough years to earn a retirement—20 years I think—and then takes a public employee job with the State staying long enough to earn a pension, and during all those years pays into the Social Security System earning a Social Security Pension—don’t you think they deserve what they paid for, worked hard for? You could have had that type of hard earned security too—it just takes doing what they did.
That’s all a 2/3 reduction on SS money I paid in working non state retirement jobs. 29 years in state system, 20+ years working in SS jobs. So if you should have 2700$ from SS, you would only get 900. You know you can’t tell them (your employer) oh hey, don’t hold that SS out of my check, I’m not going to get it back. None of the folks who have this can draw unless they have the 40 quarters that all SS recipients have to have. This isn’t some huge double dipping scam. And that’s just Ak, I don’t know the rules for the other 15 opt out states who have state employees that didn’t pay into SS. But we are a minuscule number compared to some of those states, and dying off every day. These are not young people.
I’m sure that once the state of Alaska tackles the benefits of the state and figures out their portion to deduct from today’s retirees for retirement, health and any other benefit that will have to be paid ahead and in accounts for future Social Security and Medicare from monthly checks for retirees and those who are working today, the whole pay system for the state will change. Are you ready for that Alaska? How much will the legislature dump into special accounts and will it cover the past from the dates of WEP and GPO? Will the retirees want that or do they have a choice? What about the deceased and the living in a family? What of those situations? It is going to be a mess. If all of the decisions can be done by the end of the legislative session this year of 2025 that would be great. Personally, we don’t have a very smart governor or very smart commissioner of revenue. Its ole “Lying Mealy Mouthed Adam Crumb” under Dumb Dunleavy. Good luck to the legislature and how are you going to pay back to 1983? To the federal government, that is!! How re you going to do this? How are you going to deduct from monthly pay checks starting on 2025?
George D, the Military members have always paid into Social Security and still do. If that retired military person then goes to work for the federal government, that person has to pay into Social Security as do all federal employees for decades. And that person also pays into the federal retirement program, Federal Employee Retirement System (FERS). BTW, federal employees no longer have a full Defined Benefit retirement program. Hopefully, you don’t have a problem with that. Or do you?
I wouldn’t have much of a problem with this if the Social Security system were amended to add these 2 items: (1) All government employees, including state, local and school employees were mandated to pay into the system and (2) The income cap on taxing earnings for Social Security were removed. That cap is currently around $165,000. Any income earned after that cap is not taxed by Social Security so that person earns about 6.2% more take home pay and the employer also does not have the 6.2% as an expense.