Many Educators Across America Are on the Verge of a Retirement Benefits Boost

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Hundreds of thousands of current and former K-12 educators nationwide would be newly eligible for full Social Security benefits when they retire, under a bill that has passed Congress and is now waiting President Joe Biden’s signature.

The Social Security Fairness Act eliminates two components of federal retirement policy designed to help low-income retirees that have long drawn the ire of educators and their advocates: the Windfall Elimination Provision and the Government Pension Offset.

The House voted 327-75 to approve the bill on Nov. 12. On Dec. 20, 76 U.S. Senators—46 Democrats, 27 Republicans, and 3 Independents—voted to send the bill to Biden’s desk.

Biden is expected to sign the bill into law. The result: Educators in public school districts who don’t participate in Social Security would now be eligible for Social Security benefits that account for all their lifetime earnings from employers that do participate.

The changes would affect many of the educators who work or have worked at schools in the 15 states where many or all public school workers aren’t eligible to participate in Social Security. Specifically, educators in those states who spent substantial portions of their career working in the private sector could now collect full Social Security benefits.

The bill would not change the fact that educators in those 15 states who have worked their entire careers in schools will not be eligible for Social Security benefits upon retirement.

Those states are Alaska, California, Colorado, Connecticut, Georgia, Illinois, Kentucky, Louisiana, Maine, Massachusetts, Missouri, Nevada, Ohio, Rhode Island, and Texas.

How the policy changes will affect retired educators’ wallets

To understand how the policy change will work, consider a scenario: A teacher in Kentucky retires from her school district at age 66 after 20 years on the job. Before that, she spent 25 years in the corporate world. And for her last 10 years as a teacher, she also worked a part-time retail job in the private sector.

This hypothetical teacher’s two private-sector employers withheld Social Security taxes from her paychecks. But under the Windfall Elimination Provision, her Social Security retirement benefits stemming from that private-sector income would be reduced by up to half the payment she receives from her state pension.

Upon the passage of the new law, that same educator would receive her state pension as well as the Social Security benefits tied to her private-sector income.

Similarly, for the smaller number of educators with spouses or deceased relatives who qualify for Social Security benefits from their own employment histories, the Government Pension Offset reduced the benefit amount those educators received by two-thirds of their pension amount. The bill would wipe out that reduction, so a teacher can collect both their pension and their spouse or deceased relative’s full Social Security benefits.

In a Dec. 21 press release, the National Education Association, the nation’s largest teachers union, hailed the legislation’s passage as an “astonishing accomplishment.” The release quotes a Connecticut teacher of 13 years who retired in 2024 and saw her Social Security benefits reduced, even as her relatively short teaching career meant she was eligible for less than one-fifth the maximum pension in her state.

The teacher, Susan Strader, said in a statement that it’s “devastating to see how serving as a public employee negatively affected my finances in retirement.”

Not everyone sees the policy change as wholly positive, though. Some experts on Social Security benefits worry that without broader reform, adding new costs to the program—particularly ones that aren’t precisely targeted to benefit the most economically disadvantaged workers—could pose bigger headaches for retirees in the coming decades.

“This is just giving out more benefits without taking in more revenue,” said Cory Koedel, a professor of public policy and economics at the University of Missouri who has extensively studied Social Security and public pensions.

Without broader reform, “it’s just going to accelerate cost overruns” that eat into future retirees’ benefits, he said.

Why many public school workers can’t tap into Social Security

The Social Security Act, signed into law by President Franklin D. Roosevelt in 1935, created a 6.7 percent income tax for private-sector workers and their employers that serves as the basis for Social Security payments to retirees.

Once workers reach their 60s, they begin receiving Social Security checks drawn from current workers’ tax payments. The amounts are determined by a complex formula that offers more aid to lower-income retirees.

But this landmark social-welfare policy excluded all public employees, including teachers, firefighters, and municipal workers.

Congress loosened the requirements in the 1950s, giving states the option to extend benefits to public employees as they saw fit. The majority of states did just that, alongside the pension funds they separately maintain for public employees.

But more than a dozen states kept the ban on Social Security benefits for public employees in place, extended Social Security benefits only to certain groups of public employees, or let public employers decide whether or not to offer those benefits.

In Texas, for instance, only 19 out of more than 1,200 public school districts allow all their employees to benefit from Social Security, while another 37 districts permit Social Security benefits only for employees who aren’t teachers or administrators, according to a report from the Texas Classroom Teachers Association.

Researchers estimated a decade ago that roughly 1 million U.S. teachers were ineligible for Social Security. States that held back Social Security benefits reasoned that those educators would be suitably covered by their pensions.

For many educators, that’s true.

But researchers in 2022 estimated that as many as 1 million state and local government employees, including educators, who aren’t eligible for Social Security, earn less from state retirement plans than they would if they were eligible for Social Security.

That’s because pension benefits are notoriously complex and unevenly distributed.

Many educators don’t work for school systems long enough to qualify for the maximum benefit. Some states’ pension plans adjust payments to account for the rising cost of living, while others do not. And pensions, unlike Social Security, don’t uniformly afford higher benefits to lower-income workers.

The Windfall Provision Act worsened those pain points for some pension-eligible educators by forcing them to forgo hundreds of dollars a month in Social Security benefits they accrued during their professional careers from private-sector jobs.

The Government Pension Offset, meanwhile, reduces pension recipients’ Social Security benefits they received from a spouse or deceased relative by up to two-thirds of the pension benefit. Women make up roughly 83 percent of the Social Security-eligible workers affected by this provision, the nonpartisan Congressional Research Service reported.

Earlier this year, a school bus driver who transports students with disabilities testified before Congress that if she were to retire, she would be forgoing roughly $1,500 of the $2,100 in monthly Social Security benefits she had been receiving since her husband died 10 years ago.

“My husband thought he was leaving me with a benefit that would allow me to live with dignity in retirement,” said Ward, according to a news release from the American Federation of State, County and Municipal Employees, the union whose Local 11 covers workers in Ward’s district. “We’ve always had a second income to keep us going, and to lose that is just overwhelming.”

Some experts worry long-term woes may outweigh some educators’ gains

Some proponents of expanded retirement benefits were skeptical that the Social Security Fairness Act was the right fix.

The newly passed changes are projected to add $196 billion to the ballooning costs of Social Security, according to the Congressional Budget Office. By 2035, the program was already slated to have only enough money to pay for 75 percent of scheduled benefits.

Koedel sees the newly passed legislation as a victory for advocates of public employees including educators, but not necessarily as a victory for proponents of redistributing resources to those in society with the greatest need.

“Removing this policy is going to mostly transfer resources to well-off people—not millionaires and billionaires, but people who are more well off than average,” said Koedel. “Typically that’s not what I want the government doing.”

Some experts have proposed other avenues to improve educators’ retirement benefits.

States could expand retirement options for educators by extending Social Security to all educators. Georgia lawmakers proposed doing just that in 2023, as did Rhode Island lawmakers earlier this year, but neither bill passed.

The Center for Budget and Policy Priorities, a left-leaning think tank which opposed the Social Security Fairness Act, suggests the federal government could use its increasingly robust access to employment data to ensure that it’s not withholding Social Security benefits from workers who won’t earn sufficient retirement income through other means.

And Chad Aldeman, an expert on teacher pensions who has long advocated against eliminating the WEP and GPO, thinks Congress should instead pass a law extending Social Security benefits to all educators nationwide.

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