A contentious provision of allowing some teachers to switch jobs on their last day before retiring and receive both their pensions and Social Security spousal benefits has escaped being abolished, for now. Although the House voted in favor of a Social Security bill that aimed to close this perceived loophole, the required two-thirds supermajority vote was not achieved. Representative E. Clay Shaw Jr. intends to reintroduce the bill before the end of the session with changes that would only require a simple majority for passage. The issue revolves around fairness, as these teachers are seeking special treatment that others do not receive.
The concern arises from a federal report released last autumn that highlighted how around 4,800 teachers in Texas and Georgia had utilized specific tactics to maximize their retirement benefits. These teachers worked in districts that offered pensions but did not participate in the Social Security system. To circumvent the limitations on federal retirement aid gained through their spouses, they would spend their last day of employment in a position covered by Social Security, such as janitorial or clerical work, or as teachers in districts that participate in Social Security.
These "spousal benefits" are generally meant for nonworking spouses whose partners have paid into the Social Security system. In the cases of Texas and Georgia, the Social Security system could potentially incur costs of at least $450 million over the lifetime of the enrolled teachers, according to the General Accounting Office’s report. The report only examined cases in these two states and did not explore nationwide numbers, although the loophole applies to government workers in 26 other states.
A law passed in 1977, known as the "government-pension offset," dictates that retirees with state or local government pensions cannot simultaneously receive full spousal Social Security benefits based on their partners’ careers. However, if employees spend their last day in a job covered by Social Security, they can bypass this prohibition. Rep. Shaw’s proposal seeks to extend the requirement of working in "Social Security" jobs from just the last day before retirement to five years to be eligible for spousal benefits. In addition to closing the loophole, the bill also aims to terminate Social Security benefits for felons and fugitives.
John Cole, president of the Texas Federation of Teachers, argues that the current law ensures teachers receive what they are owed. Texas teachers had strongly opposed Rep. Shaw’s bill. Cole explains that if teachers work in a district that does not participate in Social Security for the majority of their careers and then retire in a district that does, they lose the Social Security benefits they have contributed. He believes that the bill was an unkind and bureaucratic response to an exemption that enabled a small number of school employees to receive their duly earned benefits. Currently, only 50 out of the 1,100 school districts in Texas participate in Social Security, exacerbating the issue for teachers.
