New WEP Reform Bill Introduced
Richard Neal (D-MA), a U.S. representative from a non-Social Security state, has reintroduced legislation to repeal the Windfall Elimination Provision (WEP).
The WEP is a federal law that reduces an individual’s Social Security benefit if they also have a pension from “non-covered” work (i.e., no Social Security taxes paid). SERS believes the current WEP disproportionately harms low-wage public employees, and has been working closely with Neal, House Ways and Means chairman, and Rep. Kevin Brady (R-TX), House Ways and Means ranking member, on a legislative solution that will create a fairer formula for retirees.
Neal recently introduced HR 4540, a bill that proposes to “fix the WEP for future retirees and provide meaningful relief to current WEP retirees.”
HR 4540 would replace the current WEP formula with a fairer version that will pay Social Security benefits in proportion to the share of a worker’s earnings that were covered for Social Security purposes. Congressman Neal’s version of WEP reform couples this fairness provision with an additional benefit guarantee ensuring no benefit cuts relative to current law for all current and future retirees.
The Neal bill also improves the benefits of current retirees impacted by the WEP. If the bill passes, current WEP retirees will receive $150 per month in relief payments.
Earlier this year, Congressman Brady introduced HR 3934. Similar to Neal’s bill, HR 3934 proposes to “replace the WEP with a formula equalizing benefits.” While Brady and Neal have filed separate bills, both are dedicated to seeing retirees receive fairer share of their earned benefits.
SERS is reviewing both proposals and is committed to supporting a solution that restores fairness and reforms the WEP. Stay tuned as we will provide updates on how you can help.