Congress has taken a step toward passing a federal law that could boost Social Security benefits for thousands of Alaskans by hundreds of dollars a month.
The U.S. House of Representatives on Tuesday approved a bill by a vote of 325 to 75 that would eliminate the so-called Social Security gains reversal provision and the state pension offset provision.
These provisions, in place for more than four decades, meant that Alaskans who worked in the state’s public sector — including as teachers and public safety officials — and who also worked in jobs outside Alaska’s public sector, could see an increase in their Social Security benefits. .
Alaskans who qualify for state public retirement benefits are not eligible for Social Security. Under current federal law, that means if they worked in Social Security-eligible jobs before or after working in Alaska’s public sector, their benefits could be reduced by thousands of dollars a year, even if they spent decades paying into Social Security.
The only representative in the US House of Representatives from Alaska, Mary Peltola, was one of the supporters of this legislation.
“Right now, too many Alaskans are not getting the Social Security they are owed. Our teachers and public servants deserve the benefits they have paid,” Beltola said in a statement posted on social media.
The bill still must be passed in the US Senate and signed by the president in order to become law. Members of the leadership in the US Senate have not announced a plan to put the bill to a vote.
Both Alaska Republican Senators Lisa Murkowski and Dan Sullivan have expressed their support for federal reform.
Murkowski is a co-sponsor of the Senate legislation, along with Maine Republican Sen. Susan Collins and Ohio Democratic Sen. Sherrod Brown.
In a statement last year, Murkowski said public sector employees “deserve the Social Security benefits they worked for and earned.”
“This commonsense, bipartisan legislation that I have supported in every Congress since I have been in the Senate will eliminate unfair deductions for their benefits,” Murkowski said in a statement last year.
Sullivan “believes this is an important issue for Alaska, and he has worked tirelessly with educators and other public employees to stop cuts in Social Security benefits for Alaska workers who qualify for retirement benefits through certain programs, such as Alaska program. PERS (Public Employees Retirement System) and TRS (Teachers Retirement System).”
“The Senator believes that Alaskans should not be penalized by the Social Security Administration and the IRS for being pushed into a system they did not choose. Senator Sullivan continues to work with all relevant agencies to find a solution that works for Alaskans,” Quinn said.
The Alaska Legislature unanimously passed a resolution earlier this year supporting repeal of the federal provisions.
Anchorage Democratic Sen. Bill Wilikowski, who co-sponsored the resolution, said public sector employees in Alaska are significantly affected by the federal provisions because those hired after 2006 are not eligible for a defined-benefit retirement system, meaning they do not have a guaranteed income in retirement. . Alaska’s post-2006 system offers only a 401(k)-style investment account, and the state does not guarantee a savings rate.
“That’s why Alaska employees get hit so hard, because they don’t get a pension, and then their Social Security is actually reduced just because they work for state or local government,” he said. Wilikovsky. “So it’s really discouraging for people to want to work in state or local government, because that would potentially cut their Social Security by $7,000 a year, and that number is going up every year.”
If the federal law is passed and signed by the president, Wilikowski said, it would benefit Alaska’s economy by putting several thousand additional dollars into the pockets of many Alaskan families.
Tim Parker, former president of NEA-Alaska, a union that represents most teachers in the state, said he has long called for the repeal of those provisions, which he said penalize workers who in many cases don’t learn about the penalty until after they get a job in the sector. year or until their retirement.
Parker said he talked about the bill with the late U.S. Sen. Ted Stevens of Alaska more than 20 years ago.
“It’s something Ted never thought could happen,” Parker said. Now, he said, decades of work are paying off. “This work we’ve been doing, which seemed like an uphill battle we could never win, seems to have convinced enough lawmakers.”
Parker, who is now retired after 22 years as a teacher, said teachers in Alaska were hit hard by Social Security cuts due to the state’s current retirement system.
“To me, it’s like you’re getting kicked on top of being kicked already,” Parker said.
Parker is also likely to be personally affected by the rulings. Before becoming a public school teacher in Fairbanks, he worked for several years in the private sector.
“If this worked, I would get $300 instead of $150 (in monthly Social Security benefits),” Parker estimated.
In Parker’s case, the impact amounts to little change, but many Alaskan families rely heavily on Social Security in retirement, meaning cutting benefits puts them in difficult situations.
“Everyone has a little different impact on them, from zero to a lot,” Parker said.
Even if the federal legislation is signed into law, it will not solve the broader challenges facing Alaska’s public sector retirees, Parker said. In 2006, the country switched from a defined benefit pension system for public employees to what is known as a defined contribution system, which means employees can invest in a savings account but have no guaranteed income in retirement.
That’s something many lawmakers say they hope to change in the upcoming legislative session. Earlier this year, the state Senate passed a bill that would restore a guaranteed pension for public sector workers in Alaska. The bill was subsequently blocked by Republicans in the state House, but a bipartisan coalition preparing to flip control of the chamber has signaled that pension reform could be high on its agenda when the Legislature convenes next year.
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