STRS vs. Social Security

[DivaJen]

I have 8+ years of credit in California's teacher retirement system (STRS). I also have and am accumulating quarters of credit towards social security. A question recently crossed my mind: is there any sort of conflict between the two of these? If I claim one when I'm old enough, do I forfeit claims to the other? Are they in any way related in that regard? I never thought so before and figured I could get a certain amount of benefits from STRS as well as from SS, but for some reason I've begun wondering about that. Anyone know? Thanks in advance.

[sweeps]

May be of interest

[sweeps]

Also this

[DivaJen]

Thanks for the links - that gives me some good reading to start with.

[Joan.of.the.Arch]

Here are the states in which teachers with state administered pension programs are either not eligible or are eligible for only reduced (like 1/3) Social Security regardless of quarters of paying SS taxes:

Alaska
California
Colorado
Connecticut
Illinois
Louisiana
Maine
Massachusetts
Missouri
Nevada
Ohio
Rhode Island
Texas

Effected are the possibilty of collecting spouse's benefits and survivor's benefits, in addition to one's "own" social security.

I might have it wrong but I think your state teachers reirement pension is defined as a "windfall" and because of a Windfall Elimination Program, your would-be social security is cut. Private pensions, savings, and investment income are not considered windfall for SS purposes.

I think some (all?) states have figured a way for retiring teachers to choose which program (SS or STRS) to get funds from.

I would like to hear more on this from other teachers and other public employees.

[DivaJen]

Interesting, and somewhat infuriating, too. I put in X years as a public school teacher and Y years as a private sector employee, and one has to somehow negate the other? How is that fair or just?

More insights on this topic would be greatly appreciated.

[MonkeyMama]

The overall thinking for government workers is that they do not pay into the programs we all have to at no choice because they want better programs. Seriously. Overall STRS is s'posed to be better than social security. As you pay into STRS that is where your retirement money will come from. You will not receive benefits from SS since you are not paying into it.

Since you paid into SS before, you will get credit for the years you worked. maybe take some away to make it fair I guess - since it seems you do have to forfeit some. THat part I don't really understand. Just overall keep in mind the intention was to get you MORE benefits. What the reality is - I haven't a clue.

I know a lot of people who work for the government out here and they just haven't a clue. HAd a teacher friend who had no disability, because they get to opt out of SDI and have more state cHOICES than the rest of us. So she forewent any insurance and whines whines whines she couldn't take longer maternity leave. Well the government says I have to pay x dollars a year for state disability. IF I Choose something else I have to pay for both. She had more options. Don't whine to me because you have more options and BETTER benefits when we just have mandatory insurance programs - the rest of us. SO you opted not to have any insurance - take some responsibility.

The real question is if you will ever see a dime you paid into SS or STRS anyway. Good Luck if you are young. That is the true travesty in all this - that we are all paying a huge part of our check for benefits we will never get.

[Joan.of.the.Arch]

I agree that teachers in these states should not be surprised to find out they can't get full Social Security, because all the info was available when they signed on to the job. They were fully informed, so I don't think they can claim they were hoodwinked.

However, it does seem odd that the same people could have taught in a private school and participated in a retirement program there and then also collected full Social Security. And I'm not talking about people who did not pay into the SS system. I'm talking about public school teachers who worked in Social Security paying jobs in addition to their teaching--parttime, summers, the years before they were teachers, and even the years after retirement. They've easily paid in enough that they would qualify for Social Security had they not participated in the state's teacher pension program.

I think there are plenty of other state government employees who also participate in state administered pensions, but who ARE NOT shut out of Social Security when they have sufficient SS earnings. They acn collect from both systems. Federal employees are a different story, I think. (Hope someone more knowlegeable than I will fill us in.)

It just seems odd that someone who's paid into SS, can be disqualified or qualified at only a reduced rate, while there are people who never paid into it, yet can receive benefits. Like my aunt who married pregant in high school and who never had a paying job. Her husband paid in, of course. He died; she collects "his" Social Security.

Does anyone know if these teachers are also shut out of Medicare? If so, what a position! Because I've never heard of a pension program that includes medical benefits that do not continually get negotiated (mostly downward in coverage, upward in expense) along with workers' insurance benefits. So a retiree could not depend on what their insurance would be in the future.

And is the quality of administration likely to be similar to that of private company pensions? You know---like the ones that have gone belly up?

[Saving in So Cal]

Your retirement system should conduct periodic retirement seminars in your area that will help you understand how participation in STRS affects social security in your particular situation.

Also, to correct a few misperceptions out there, many governments do fully participate in social security. I pay a 5% contribution to CalPERS and I pay full social security taxes. In addition, public employment is my second career, so I have paid full social security taxes for over 22 years. After I accepted my fourth government job, I was told generally that "windfall elimination" legislation may affect my social security benefits upon retirement, but I was not given any specifics. Instead, I was told I would need to investigate the impact on my own. My point is that it is not at all uncommon for public employees to be unaware that participation in a public retirement system affects social security benefits. Whether it is fair or not is a matter left to the wisdom of Congress.

[Squantum]

Originally Posted by Joan.of.the.Arch

I think there are plenty of other state government employees who also participate in state administered pensions, but who ARE NOT shut out of Social Security when they have sufficient SS earnings. They acn collect from both systems. Federal employees are a different story, I think. (Hope someone more knowlegeable than I will fill us in.)

It just seems odd that someone who's paid into SS, can be disqualified or qualified at only a reduced rate, while there are people who never paid into it, yet can receive benefits.

"Older" federal govt workers who paid into a traditional-style pension plan and receive traditional pensions are NOT eligible social security, even if they have accumulated enough Social Security quarters to be eligible for benefits through private sector positions. It's even worse if one accumulated those SS credits through self-employment, since then would had to pay the employer + employee portions of the SS tax, but still receive ZERO benefits.

I believe the govt changed its retirement system several years back so that all employees hired after X date are subject to a 401K-style retirement system. I don't know the SS system for them.

Yet private sector workers with traditional pensions are still eligible for social security. Double standard.

[rob62521]

Originally Posted by Joan.of.the.Arch

Here are the states in which teachers with state administered pension programs are either not eligible or are eligible for only reduced (like 1/3) Social Security regardless of quarters of paying SS taxes:

Alaska
California
Colorado
Connecticut
Illinois
Louisiana
Maine
Massachusetts
Missouri
Nevada
Ohio
Rhode Island
Texas

Effected are the possibilty of collecting spouse's benefits and survivor's benefits, in addition to one's "own" social security.

I might have it wrong but I think your state teachers reirement pension is defined as a "windfall" and because of a Windfall Elimination Program, your would-be social security is cut. Private pensions, savings, and investment income are not considered windfall for SS purposes.

I think some (all?) states have figured a way for retiring teachers to choose which program (SS or STRS) to get funds from.

I would like to hear more on this from other teachers and other public employees.

You are correct, Joan, on Illinois. My friend of mine retired a couple of years ago and gets teacher's retirement, but if she put in for social security she would receive $120 a month although she had paid in more quarters than she needed. She can sub two days a month and make more money than what s.s. pays her. Social security told her she was double dipping so that's why they won't give her but a small percentage. In Illinois if you are a teacher of you have taught for awhile, you don't get a choice between the pension or social security -- you get the pension.

[sweeps]

Interesting article:
Audit: Loophole could cost Social Security billions

[Joan.of.the.Arch]

Yes, it is interesting. These retiring teachers got hired for one day of substitute teaching in a district that participates in the Social Security System. They paid the school district an average of $364 in "fees"---more than than were paid by the hiring district, paid their Social Security tax on the day's wages. Now their spouses may be eligible for Social Security spouse benefits when the teacher dies. And the districts hiring them as substitutes actually raised a total of $7,000,000 through the fees charged to the teachers.

It is not yet settled whether the spouses really will be able to get spouse's benefits. I guess a proclamation by the SS Administration will be the semi-final word. Maybe a court case would settle it. With some 19,000 teachers involved, I suspect that would be plenty to put together a class action suit. Wonder if they would win. Is it really a loophole, or have these hiring school districts misread the regulations? Certainly it is not in the spirit of the law.

I know some teachers who might love to get a one day job in these Texas school districts if the loophole truly exists and doesn't get closed.

[tinapbeana]

from the way the article read, the 'loophole' was in fact there and was closed in 2004 or so when the law was changed