From the Office of State Senator Glenn Hegar, District 18

For Immediate Release
March 26, 2008
Contact: Lisa Craven
(512) 463-0118

U.S. Social Security Administration Fails Texas' Retired Public School Employees

In January, the Teacher Retirement System of Texas (TRS) disbursed a highly deserved one-time annuity payment, or "13th" check, to Texas' 250,000 eligible retired public school employees. For many retirees, the extra payment was their first benefit increase since 2001 and one that has been long overdue.

This month, however, the United States' Social Security Administration (SSA) sent letters, informing some retirees that their Social Security payments will be reduced in accordance with the Government Pension Offset (GPO) provision of the Internal Revenue Code. The GPO provision reduces or eliminates a person's spousal benefit, also known as the auxiliary benefit, and is the portion of Social Security a person may be able to receive upon death or divorce of their spouse.

In essence, Social Security benefits will be reduced because the one-time payment received by each retiree will be included in the amount of their overall pension for calculation purposes. The GPO uses a formula to recalculate a person's reduced Social Security amount based on the new value of the increased pension. When an annuitant receives a permanent increase in their government pension, Social Security decreases the amount paid to the retiree.

It is important to note, that the U.S. Congress' intent in enacting the GPO provision was to ensure that when determining the amount of spousal benefit, government employees who do not pay Social Security taxes, would be treated similarly to those working in the private sector and who do pay Social Security taxes.

This federal action contradicts the purpose of the "13th" check and certainly disregards the needs of our retirees. The TRS one-time payment was not a permanent increase and does not affect retirees' long-term pension benefits. Nevertheless, amid the rising costs of living and healthcare, the "13th" check provided some much-needed relief to our Texas retirees. This news is shocking and the Texas Legislature clearly did not anticipate the SSA taking such actions.

"I am truly disappointed by the recent news, and implore the SSA to reconsider including the "13th" check in the GPO formula," said Senator Hegar. "The Texas Legislature worked hard to authorize this well deserved check for our dedicated retired school employees, and I am troubled by the SSA's decision. Although the SSA's decision is a federal issue, I am committed to working with my congressional counterparts to reexamine the GPO formula, so that this does not happen again."

"Our retired educators have proudly served our State and certainly deserve their "13th" check in full and without any reductions in their Social Security benefits," explained Senator Hegar.

Top