Welcome to the latest edition of This Week in Pensions! We have gathered the best stories about pensions and retirement security from the previous week. You need to know this news in the fight for a secure retirement.
The Senate Moves Forward with the Social Security Fairness Act
This week, the Senate committed to bringing the Social Security Fairness Act, which will repeal the Windfall Elimination Provision and Government Pension Offset (WEP & GPO), to a vote before the end of the year. The 73-27 vote to proceed with consideration of the Social Security Fairness Act, which will only need a simple majority to pass into law, has broad bipartisan support.
Senate Majority Leader Chuck Schumer said on social media, “We will vote on taking up the Social Security Fairness Act to repeal flawed policies that eat away at the benefits of those who’ve worked as teachers, firefighters, postal workers, or public sector workers. Retirees deprived of their hard-earned benefits will be watching closely.”
Retirement experts suggest that WEP & GPO deter applicants from the public sector. Retired California teacher and widow Michelle Cosgrove spent the first half of her career as a paralegal in the private sector, paying into Social Security. In her late 70s, Cosgrove now works as a cashier at Dollar General to pay her bills.
“If I’d have stayed home and done nothing [for work], I’d have gotten all the money,” Cosgrove said. “Had I known this, I might not have gone into teaching. I’d have picked something different.”
Michigan House Moves Pension Bill Through to Senate
In 1997, Michigan lawmakers closed the pension system to new state employees, triggering a long decline in recruitment and retention of the public workforce. Now lawmakers are working to pass legislation allowing more state employees to move out of 401(k)-style plans and into more traditional pensions before the end of this year’s legislative session.
State Rep. Matt Koleszar, author of House Bills 6060 and 6061, the two bills designed to expand access to traditional pensions, spoke of the detrimental effects of switching to a defined contribution system on education specifically. “We have suffered from a massive teacher shortage, and one of the biggest reasons is we don’t have a good retirement system for teachers,” Koleszar said. “The big sales point back in 2018 was, ‘Hey, if you give them a 401(k), it’s affordable.’ Sure was. As conditions in the classroom got worse, they took their 401(k) and left.”
Despite intervention from notorious pension opponents Reason Foundation, the bill passed the House in a vote on December 13 and now lies in the Senate.
For up-to-date information on MI HB 6060, check out our legislation tracker.
Be sure to check back next Friday for the latest news in the fight for a secure retirement! For now, sign up for NPPC News Clips to receive daily pension news from across the country directly to your inbox.