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The Government Pension Offset
Social Security issues are complicated and jargon-filled ventures seemingly designed to confuse the average retiree. However, Social Security provisions can have an enormous, negative impact on your retirement, and most people who fall victim to these issues are unaware of the consequences until it’s too late. So even though terms like “non-SS-covered employment” may make you want to pull your hair out, they are certainly worth learning about. A prominent issue that Texas retired teachers face is the Government Pension Offset. The Government Pension Offset, or GPO, is a Social Security provision that reduces government employees’ spousal or survivor benefits.
The Windfall Elimination Provision
The Windfall Elimination Provision (WEP) is an unfair federal provision preventing retirees from receiving the Social Security benefits they are owed. The WEP, which took effect in 1983, provides a means of eliminating the “windfall” of Social Security benefits received by beneficiaries who also receive a pension based on work not covered by Social Security. Ninety-five percent of Texas public school employees do not pay into Social Security through their work with Texas schools. However, many have other jobs before, during, or after their employment in education in which they do pay into the federal program.
TRS-Care Funding
TRS-Care is the health insurance program more than 260,000 retired Texas educators rely upon. The program is provided by the Teacher Retirement System of Texas (TRS), the state agency responsible for running teachers’ retirement pensions. During the 85th Regular Session of the Texas Legislature, TRS-Care faced a $1.1 billion budget shortfall. If nothing had been done by the Legislature to address this issue, retirees’ premiums would have skyrocketed (even tripling), and the program could have closed within two years, leaving many without a quality health care option. The Texas Legislature made changes to TRS-Care funding for the program to remain solvent.
TRS Defined Benefits
The Teacher Retirement System of Texas (TRS) has provided its defined benefit (DB) pension plan to retirees since its creation in 1937. During that time, TRS has never missed a payment to its annuitants, and it has stood as a testament to stability through times of great economic uncertainty. The defined benefit plan teachers in Texas pay into is a source of great pride, and it is one of the true upsides of participating in the teaching profession. As many private companies have pivoted away from defined benefit plans, TRS has stayed true to its slogan of being “the forever fund".
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