A recent editorial in the Dallas Morning News featured Faye Higgs, a 24-year-old customer service representative who decided that her real calling was to be a teacher. Having already earned a degree in Criminal Justice, Higgs qualified for DISD's alternative certification program and, after taking evening classes and state exams, last fall she began a new career as a special education teacher. The editorial declared, "It's never too late to start a career in teaching."
Not mentioned in the News editorial--nor, mostly likely, in the alternative certification classes--was the impact Higgs' decision will have on her retirement. Unless laws are changed, Higgs and others who change careers to become teachers will lose part or all of their Social Security benefits.
Two Social Security rules are to blame, the Windfall Elimination Provision and the Government Pension Offset. Although it is ludicrous to label any government pension a "windfall," WEP applies to government workers--state or federal--who receive a pension from a job that does not pay into Social Security. Texas teachers, for example, pay into the Teacher Retirement System of Texas, but most districts have opted out of Social Security, perhaps because they do not want to pay the employer's portion of FICA taxes.
So, what is the problem? Why would teachers expect to receive Social Security when they have not paid into it? The answer is that they have paid Social Security, perhaps all their working lives. Beginning in high school, through college, continuing in second jobs at night and in the summer once they began their teaching career, teachers have had payroll taxes deducted from their paychecks. Because these jobs were part-time or low paying, however, they do not meet Social Security's threshold of 30 years of "substantial earnings" to avoid the WEP penalty. A maze of charts quantifies "substantial earnings" and the resulting benefit reductions, but in the end, Texas teachers receive far less than their FICA-covered earnings would have provided had they not been public servants.
Another provision, the Government Pension Offset, also impacts teacher retirement, specifically spousal benefits. Normally, spouses of Social Security recipients receive up to one-half of their husband or wife's benefit. However, for those covered by a government pension, even if it is a state pension, the spousal Social Security benefit is reduced by two-thirds of the amount of the other pension. Generally, that means no spousal benefit at all. While at first glance this penalty may seem justified, had the spouse never worked at all, he or she would have qualified for the spousal benefit. Public service thus becomes a liability.
A bill before Congress, HR 82, the Social Security Fairness Act, would remedy these inequities. A number of our local Representatives in North Texas have signed on as co-sponsors, probably not because they are concerned about teachers, but because these penalties are a disincentive for people to leave the private sector and become teachers. Since Texas is suffering a teacher shortage, we need to remove as many obstacles as possible for people like Faye Higgs.
