Wednesday, August 24, 2016

Probably Won't Change in the Near Term

As far as I am concerned, the Windfall Elimination Provision is extremely outdated, for most workers today do not work in one job or career for 30 years.

It made assumptions that simply weren't true then and are less true now.

I don't think states that don't pay into Social Security are going to start paying into the system, however. The people who have or are posed to have generous pensions are not about to give those up.

However, that is an issue separate from the totally confiscatory WEP.

Not that it is going anywhere this session or in the near future, but here is a total repeal of WEP floating around in the House.

Mentioned in the first link is this good report about how teachers are screwed over on pensions and Social Security.

This article is also good and demonstrates how teachers are screwed over on pensions, especially since Congress allowed for longer vesting periods for state pensions than for those in the private sector. I am lucky I got vested in Nevada after five years, and I will also be vested in Oregon after five years, assuming I don't get sacked up here:


The safe harbor formula is easy to execute—bureaucrats need to look at only a few basic details about the plan—but doing so ignores some important variables. First, the safe harbor rules specifically carve out an exception for states to employ “vesting periods” that impose minimum requirements on the number of years an employee must work
before becoming eligible for pension benefits.8 With no constraints on vesting requirements, states can and do set vesting periods that are longer than what
would be required in the private sector. For example, non-Social Security states like Connecticut, Illinois, Georgia, and Massachusetts withhold all employer provided
retirement benefits from teachers until they have reached 10 years of service. (Social Security imposes its own requirement that workers contribute at least 10 years to qualify for some benefit. This works like a vesting requirement, except, unlike a vesting period in a single retirement plan, Social Security is not tied to a specific employer or state and more than 95 percent of jobs are covered by Social Security. The main exception is state and local government workers, including teachers in the 15 states without coverage.9
) These long vesting periods would be illegal in the private sector, where federal law requires all employees to vest within seven years.

In the 15 states that do not offer Social Security coverage to their teachers, an average of 52 percent of new teachers will fail to vest into their state retirement system, leaving them with no retirement benefit at all.10 The safe harbor provision specifically allows this.

I believe it is actually five years in the private sector for vesting. However, given how easily administrators fuck over teachers, I am surprised more teachers don't even vest in their pensions.

I am really lucky although my pensions will be dinky because I didn't work 30 years in one agency.








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