Social Security Benefits for Thousands of Teachers Set to Increase

The Social Security Fairness Act, signed into law on January 5, 2025, seeks to provide teachers and other public employees with more income in retirement by eliminating two provisions of the Social Security Act: the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). These provisions have significant implications for public employees.

The repeal of the GPO, in particular, has massive implications for the amount of money that public employees can receive from Social Security based on their spouse’s earnings. As an example for how the repeal of the GPO can increase retirement income for public employees, let’s look at a hypothetical retired couple, Brutus and Carmen.

Brutus and Carmen

Brutus and Carmen are husband and wife. Brutus has paid into Social Security his entire working life, so he is able to collect Social Security when he retires. Carmen spent her entire working life as a high school teacher, which makes her ineligible for Social Security benefits because Ohio teachers do not pay into Social Security, and she is instead eligible for a pension from STRS (State Teachers Retirement System). If Brutus were to pass away before Carmen, Carmen would receive a reduced survivor’s benefit from Brutus’s earnings record. After the repeal, Carmen will be due a larger survivor’s benefit, offering Carmen more income as a widow. Below is an example of how the repeal of GPO would affect Carmen’s income in retirement.

In the example above, Brutus’s survivor’s benefit that is to be paid to Carmen would be reduced by 2/3 of Carmen’s STRS pension monthly payment amount. This means that Brutus’s death would result in a decrease of Carmen’s retirement income by $23,760 per year for the remainder of her life. After the repeal of the GPO, Carmen’s income is unaffected following her husband’s death, allowing her to keep the $23,760 per year in survivor’s benefits that would have been eliminated by the GPO. As illustrated, the repeal of the GPO is a massive benefit for public employees with spouses who collect Social Security, greatly improving their retirement income outlook.

Implications for Public Employees

Increased Retirement Security: Repealing the WEP and GPO would provide a more equitable calculation of Social Security benefits for public employees. Many would see a significant increase in their retirement income, easing financial stress and improving quality of life during retirement.

Equity for Dual-Career Households: Public employees married to Social Security-covered workers often face reduced spousal or survivor’s benefits due to the GPO. Eliminating this offset would ensure fairness and financial stability for dual-career households.

What Are the WEP and GPO?

The Windfall Elimination Provision (WEP) reduces Social Security benefits for individuals who receive a pension from employment not covered by Social Security, such as many state and local government jobs. This includes teachers who are eligible to receive STRS (State Teachers Retirement System), state and local employees that are eligible to receive OPERS (Ohio Employee Retirement System), and other school employees that are eligible to receive SERS (School Employees Retirement System).

The Government Pension Offset (GPO) affects spousal and survivor’s benefits. Under the GPO, Social Security benefits are reduced by two-thirds of the amount of the individual’s government pension. This often results in the near elimination of spousal or survivor’s benefits for public employees, such as teachers, police officers, and firefighters.

More Information

As of January 2025, it is not known when the Social Security Administration will enact this change or how the changes will be rolled out. We will keep you updated with new information as soon as it’s made available.

For more information about the Social Security Fairness Act, visit congress.gov. For STRS Ohio’s article on the Act, visit strsoh.org. If you would like to discuss how this law will affect your personal retirement situation, call our office at (419) 697-3955 or email Devin at devin@oregonfinancial.services.