Briefing Book

White House Conference

National Association of Retired Federal Employees 606 North Washington Street Alexandria, Virginia 22314-1914 (703) 838-7760 FAX (703) 838-7785 http://www.ncrfe.org Social Security Reform The 430,000 members of the National Association of Retired Federal Employees are vitally interested in joining the national debate on Social Security reform. In October President Clinton held a roundtable discussion on retirement security for women that highlighted the case of Wilma Haga from Tennessee. Mrs. Haga is a 76 year old cafeteria worker with a small pension who states she could not survive without the Social Security check she gets each month based on her husband's work under Social Security. There are many thousands of widows in this country not as fortunate as Mrs. Haga because the Government Pension Offset (GPO) prevents them from receiving any widow's benefits from Social Security. Because of the 1977 GPO amendment to the Social Security Act, retired federal, state, and local government employees who were not covered under the Social Security system lost this valuable survivorship protection. This is particularly devastating for women with short careers in government service in lower level jobs who, as a result, receive low annuities or pensions. Two-thirds of the amount of the government annuity or pension offsets the Social Security widow's benefit, totally eliminating it in many cases. In addition to the GPO, the Windfall Elimination Provision (WEP) further unfairly reduces the income of many women and men by reducing their own earned Social Security by about 50%. The WEP was part of the 1983 Social Security Amendments. For example, a widow may have worked ten years for the government and ten years in the private sector. Her widow's benefit is offset by the GPO and her own Social Security is reduced by 50%. Where is her retirement security? It seems inconceivable that Congress would have intended that women should be affected by both the GPO and the WEP. Last May, NARFE member Bernadine A. Jemigan, testified before the House Social Security Subcommittee. Affected by both the GPO and WEP, she asked Chairman Jim Bunning, "Why are government employees being punished? Where is the fairness in this WEP and GPO legislation? Why must we continue to fight for the benefits we were promised and have already paid for? Are we going to our graves fighting this discrimination?" So far, approximately 243,000 retired federal, state, and local government employees have been affected by the GPO and some 356,000 by the WEP. NARFE insists that any reform of Social Security must address reform of both of these penalizing provisions. Not only must these debates make certain Social Security is strong for all, we must also make certain it is fair to all. In addition to including the GPO and WEP issues in the discussion on Social Security reform, we do have other areas of concern: Cost-of-Living Adjustments (COLAS). Full COLAS, based on a valid Consumer Price Index (CPI), are not benefit "increases". COLAS provide necessary inflation protection for those who are retired or disabled. Some have suggested that the COLA be based on a lesser CPI. NARFE opposes any proposal that would legislate an across-the-board percentage reduction of the COLA. Means-Testing. NARFE is unalterably opposed to means-testing Social Security benefits. Almost every American worker pays Social Security taxes and, upon retirement, receives a monthly benefit amount formulated on his or her lifetime earnings. It would be entirely inappropriate to penalize retired workers by reducing their Social Security benefits because they have successfully provided for their retirement with savings, investments and private pensions. Increasing the Retirement Age. Under present law, the retirement age increases from 65 to 67 gradually over a period of years ending with 2022. Some reform proposals would accelerate that process so that age 67 is reached much sooner. The proposals would also increase the early retirement age from 62 to 64. NARFE opposes acceleration of the age 67 retirement age and an increase in the age for early retirement. This is not good public policy, primarily because those in poor health or in strenuous physical labor jobs could not stay in the workforce longer, and would be hurt the most. Privatization of Social Security. There have been many proposals to privatize Social Security, all the way from instituting individual retirement investment accounts to investing Social Security trust fund securities in the stock market. Regardless of what the proposal is, NARFE fears that Congress may legislate something that has not been fully researched and studied. Any privatization would drastically alter the original concept of our Social Security program that has been so successful all these 63 years. The benefit and administrative consequences of any such plan must be a major issue for all of us. National Association of Retired Federal Employees Frank G. Atwater, PRESIDENT Margaret L. Baptiste, VICE PRESIDENT John Walker Hartigan, SECRETARY Charles L. Fallis, TREASURER