The Social Security Fairness Act, recently signed by President Joe Biden, is a new law that will help retired public workers, like teachers and firefighters, get more Social Security money. In Ohio, many public employees don’t pay into Social Security because they pay into state-run pension plans instead. Before this law, they got smaller Social Security checks because of rules called the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). Now, those rules are gone, and retirees will get the full benefits they earned. For example, a retired Ohio teacher who worked part-time in another job that paid into Social Security will now receive her full benefits without any penalties. This law could mean an extra $360 a month for many retirees, helping them pay for essentials like housing and healthcare.
Who Will Be Affected in Ohio?
Ohio is one of the states where public employees do not pay into the Social Security system but instead contribute to state-managed pension funds such as the Ohio Public Employees Retirement System (OPERS), the State Teachers Retirement System of Ohio (STRS), and the Ohio Police & Fire Pension Fund (OP&F). As a result, many public employees in Ohio have been subject to reduced Social Security benefits under the WEP and GPO.
Teachers
Teachers in Ohio, who are part of STRS, have been particularly affected by the WEP and GPO. Many educators paid into Social Security in earlier jobs or through second careers, only to find that their Social Security benefits were drastically reduced upon retirement. The elimination of these provisions will allow retired teachers to receive full Social Security benefits based on their contributions, providing a much-needed financial boost during retirement.
Firefighters and Police Officers
First responders, including firefighters and police officers, are another group in Ohio that stands to gain from the Fairness Act. Members of the OP&F pension system have faced similar reductions in Social Security benefits. The new law will ensure that these public safety professionals, who have dedicated their careers to serving their communities, receive the Social Security benefits they have earned without offset penalties.
Public Employees
Public employees across various sectors, including state and local government workers who are part of OPERS, will also see improvements in their retirement benefits. Many of these workers have held jobs that qualified them for Social Security but saw their benefits reduced due to the WEP. The Fairness Act will restore their benefits to the levels they would have received without the penalty.
Financial Impact on Ohio Retirees
The average monthly increase in Social Security benefits for affected retirees is expected to be around $360. For many retired public employees in Ohio, this increase could significantly improve their quality of life, helping to cover essential expenses such as housing, healthcare, and daily living costs. Additionally, the legislation includes retroactive payments for 2024, which means eligible retirees will receive compensation for the benefits they should have received in previous years.
Economic Implications for Ohio
Beyond the direct impact on retirees, the Fairness Act is likely to have broader economic implications for Ohio. Increased Social Security benefits mean more disposable income for retirees, which can boost local economies, particularly in communities with high numbers of retired public employees. This additional income can lead to increased spending on goods and services, benefiting local businesses and potentially creating a ripple effect of economic growth.
Challenges and Criticisms
While the Social Security Fairness Act has been widely praised by public service advocates, it has also faced some criticism. Opponents argue that the removal of the WEP and GPO could strain the Social Security system’s finances, potentially accelerating the depletion of the Social Security trust fund. However, supporters of the legislation contend that the fairness and equity provided to public service workers outweigh these concerns.
What Ohio Retirees Should Know
Ohio retirees who are eligible for Social Security benefits should take note of the changes brought about by the Fairness Act. Those who have been impacted by the WEP and GPO should contact the Social Security Administration (SSA) to ensure their benefits are adjusted accordingly. It is also advisable for retirees to consult with financial advisors to understand the full impact of the changes on their retirement plans.
The Social Security Fairness Act is a landmark piece of legislation that addresses long-standing inequities in the Social Security system. For Ohio’s public service workers, the elimination of the WEP and GPO means more equitable retirement benefits and a more secure financial future. As the changes take effect, many retired teachers, firefighters, police officers, and other public employees in Ohio can look forward to a more comfortable retirement with the Social Security benefits they have earned.
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The views and opinions expressed herein are those of Skolnik Retirement Solutions and do not necessarily reflect the views of CoreCap Investments, LLC or CoreCap Advisor, LLC, its affiliates, or its employees.
