The two laws, entitled the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP), affect public employees who receive a public pension from states (including Massachusetts) that opted out of the Social Security system for their employees.
The GPO reduces the Social Security spousal benefit an affected public employee can receive. So, a teacher who spent a career in public service -- while a deceased spouse worked at a private company and paid Social Security -- is only eligible for a small percentage of the spousal Social Security benefit the spouse earned. Nine out of 10 public employees affected by the GPO lose their entire spousal benefit.
The WEP reduces an individual's own Social Security benefits earned while working in a job covered by Social Security. For instance, a teacher who spends summers working at a paint store isn't allowed to receive the full Social Security benefit he or she paid into the Social Security system.
The impact of these unfair offsets is primarily felt in those states in which public employees like educators are not covered by Social Security (Alaska, California, Colorado, Connecticut, Georgia, Illinois, Kentucky, Louisiana, Maine, Massachusetts, Missouri, Nevada, Ohio, Rhode Island and Texas). However, because people move from state to state, there are affected individuals everywhere.
from MTA website (www.massteacher.org)
A Primer on the COLA (from MTA Today June/July 2010)
The MTA receives many inquiries about cost-of-living adjustments from newly retired
members and members who are considering retirement. The following information is crucial to
understanding how COLAs are computed and paid out.
In January of each year, an actuary employed by the Public Employee Retirement Administration
Commission files a report with the Legislature on any increase in the U.S. Consumer Price Index. It may
include a recommendation that the Legislature enact a cost-of-living increase in retirement allowances.
If the Legislature determines that a cost-of-living increase is required, it establishes the amount
of the increase, which cannot exceed 3 percent. It is important to understand that the cost-of-living
adjustment is only applied to a maximum of $12,000, no matter how much a retiree’s pension might be.
For members of the state and teachers’ retirement systems, this increase — up to 3 percent of the
first $12,000 in benefits — is then added to the retirement allowances of those retirees or beneficiaries
who were receiving pensions as of June 30 of the preceding year. The COLA increases are paid from the
investment income account of the state and teachers’ retirement systems.
Retirement systems other than the state and teachers’ systems must adopt G.L. c.32, Section 103,
in order to establish a cost-of-living adjustment for their members and beneficiaries. If the local system
adopts the recommended COLA, as is the case with the state and teachers’ systems, it applies to only
the first $12,000 of one’s retirement allowance. It is funded from the investment income account of
the system. As is true for the state and teachers’ systems, only those members receiving a retirement
allowance as of June 30 of the prior year will receive COLAs.
It is important to understand that the fiscal year determines the schedule for COLA eligibility; the
fiscal year runs from July 1 through June 30. For example, if someone retired on July 5, 2010, and the
Legislature approves a COLA in January 2011, that person would not be eligible for this particular
COLA because he or she was not receiving a retirement allowance on June 30, 2010.
The MTA continues to advocate for an increase in the COLA that is received by its members.
The MTA Division of Governmental Services proposes and monitors legislation that deals with
members’ pensions, as well as with the COLA. The MTA legislative chart can be viewed at