APWU of Florida Retiree Chapter

Priority Legislation & Legislative Facts

PRESIDENTIAL COMMISSION ON THE U. S. POSTAL SERVICE

           The report of the Presidential Commission on the U. S. Postal Service is to be sent to President George W. Bush by July 31, 2003 for his review and possible recommended action to the 108^th Congress.  We urge all APWU members, Retirees, and Auxiliary members to oppose any attempt at privatization of the U. S. Postal Service or the reduction of any benefits or compensation of active and/or retired federal and postal employees!

HEALTH INSURANCE PREMIUM PRE-TAX CONVERSION 

          H.R. 1231, a bill introduced by Rep. Tom Davis (R-VA) to amend the Internal Revenue Code of 1986 to allow federal civilian and military retirees to pay health insurance premiums on a pre-tax basis.  It was referred to Committee on Ways and Means, Committee on Governmental Reform, and Armed Services Committee and it has 134 Co-sponsors.  Rep. Tom Davis and Rep. Jo Ann Davis (R-VA), Chair of the Civil Service Subcommittee, have indicated their support of this bill.  Rep. Clay Shaw (R-FL), a 12-term Congressman, is Chair of the House Ways and Means Subcommittee on Social Security, and he has stated he will have hearings on this bill soon.

          We urge all APWU members, Retirees, and Auxiliary members to contact your Congressional Representatives and ask them to Co-sponsor and support this very important bill which will put extra money in your pocket.   Active federal and postal employees already enjoy these savings.

           S. 623, a bill introduced by Sen. John Warner (R-VA) is similar to H.R. 1231, and it has been referred to the Committee on Finance on March 13, 2003.  This bill would amend the Internal Revenue Code of 1986 to allow federal civilian and military retirees to pay health insurance premiums on a pre-tax basis and to allow a deduction for TRICARE supplemental premiums.  It has 16 Co-sponsors, and the bill if adopted could save you $350.00-$400.00 year.

          We urge all APWU members, Retirees, and Auxiliary members to contact your Senators and ask them to Co-sponsor and support this very important bill to create fairness between active and retired federal and postal employees, as well as military retirees.

REPEAL OF GOVERNMENT PENSION OFFSET (GPO) AND WINDFALL ELIMINATION PROVISIONS (WEP) 

          H. R. 594, a bill introduced by Rep. Howard “Buck” McKeon (R-CA), to amend Title II of the Social Security Act to repeal the Government Pension Offset and Windfall Elimination Provisions.  It was referred to the House Ways and Means Committee on Feb. 5, 2003, and it has 154 House Co-sponsors.  We believe it has a good chance of getting out of committee to the House floor for debate this time around. 

          We urge all APWU members, Retirees, and Auxiliary members to contact your Congressional Representatives and ask them to Co-sponsor and support this crucial bill to create fairness and equity. 

          S. 349, a bill introduced by Sen. Dianne Feinstein (D-CA), to amend Title II of the Social Security Act to repeal the Government Pension Offset and Windfall Elimination Provisions.  It was referred to Committee on Finance on Feb. 11, 2003.  Sen. Susan Collins (R-ME), Chair, Senate Committee on Governmental Affairs, has promised hearings on this bill.

          We urge all APWU members, Retirees, and Auxiliary members to contact your Senators in the Congress and ask them to Co-sponsor and support this bill which is entitled “Social Security Fairness Act.”

GOVERNMENT PENSION OFFSET

           The Government Pension Offset (GPO) was enacted in 1977 by Congress to treat government pensions (such as Civil Service Retirement) and survivor annuities as if they were Social Security benefits.  In 1983 Congress changed the offset to its current two-thirds offset.

The Government Pension Offset (GPO) can affect any retiree who receives a civil service pension and Social Security, but primarily affects widows or widowers eligible for spousal benefits.  Women, who typically spend less time in the workforce, and earn lower wages when they do, have been disproportionately affected by the Government Pension Offset.

They do not affect retirees who receive private pensions and Social Security.  To explain how the current law works, we will take the example of a widow eligible for civil service pension benefits of $600.00 per month and Social Security spousal benefits of $600.00 per month, for a total of $1200.00 per month. 

          Under the Government Pension Offset (WEP) provisions, the Social Security spousal benefit is reduced by two-thirds of the civil service pension benefit.  In this case, the original $600.00 Social Security benefit is reduced to $200.00 leaving the widow with a total monthly income of only $800.00 instead of $1200.00.  This is an injustice which only the Congress can rectify. 

WINDFALL ELIMINATION PROVISION (WEP)

The Windfall Elimination Provision affects how your retirement or disability benefits are figured if you receive a pension from work not covered by Social Security, i.e. the Civil Service Retirement System. 

          For employees who receive a pension and who are also eligible for Social Security benefits based on their own employment record, a different formula may be used to compute their Social Security benefit.  This formula will result in a lower benefit.  The “Windfall Elimination Provision” affects workers who reach age 62 or become disabled after 1985 and are first eligible after 1985 for a postal/federal pension. 

          Social Security benefits replace a percentage of a worker’s pre-retirement earnings.  The formula used to compute benefits includes factors that ensure lower-paid workers get a higher return than highly paid workers.  For example, lower-paid workers could get a Social Security benefit that equals about 60 percent of their pre-retirement earnings.  The average replacement rate for highly paid workers is about 25 percent. 

          Before 1983, benefits for people who spent time in jobs not covered by Social Security were computed as if they were long-term low-wage workers.  The received the advantage of the higher percentage benefits in addition to their other pension.  The modified formula eliminates this windfall.

          The Windfall Elimination Provision does not apply if:  The employee was eligible to retire from postal/federal service before January 1, 1986; or the employee was first employed by the Postal Service/Federal Government after December 31, 1983; or the employee has thirty (30) years or more of substantial earnings under Social Security.

          Employees and Retirees should contact their local Social Security office to determine the effect of the WEP on their Social Security benefits.