Academic journal article Social Security Bulletin

Interaction with Social Security of 1996 Civil Service Retirement System Annuitants

Academic journal article Social Security Bulletin

Interaction with Social Security of 1996 Civil Service Retirement System Annuitants

Article excerpt

Interaction With Social Security of 1996 Civil Service Retirement System Annuitants *

Background

The Civil Service Retirement System (CSRS) covers permanent civilian Federal employees hired before 1984, providing them retirement and survivor benefits. Employees hired afterwards, as well as those who availed themselves of the opportunity to switch in 1987, are covered by the Federal Employees Retirement System (FERS). In June 1996, almost 1.7 million CSRS worker annuitants were receiving retirement benefits based on age and service or on disability, and over 600,000 persons were receiving survivor annuities. The number of worker annuitants was already declining in June 1996 and is projected by the Actuary in the Office of Personnel Management (OPM) to reach zero around the year 2040.

Employment covered by CSRS is not covered by Social Security. Yet, nearly all CSRS employees work in jobs covered by Social Security before, after, or during their Federal careers. This situation prompted concern in the past about the potential for gaps in coverage and, even more, for the payment of overly generous Social Security benefits to CSRS employees, as well as to others in like circumstances. Thus, while auxiliary Social Security benefits were reduced dollar for dollar for simultaneous entitlement to a worker Social Security benefit, they were not reduced for a worker CSRS entitlement. Also, the weighting in the Social Security benefit formula that favors low-wage workers provided an unintended advantage to CSRS workers as well.

Over the past 20 years, several pieces of legislation addressed these concerns. Certainly the most striking was the closing of the CSRS to new entrants beginning in 1984. Other legislative initiatives included:

Imposition of the Government Pension Offset (GPO) against Social Security auxiliary benefits, beginning in 1978;

Freezing of the minimum Social Security benefit at $122 for workers first eligible in 1979 or later, followed by its complete elimination for workers first eligible in 1982 or later;

Inclusion of Federal employment in the Medicare program in 1982; and

Introduction of the Windfall Elimination Provision (WEP) computation to reduce Social Security worker benefits for persons first eligible after 1985 for both Social Security benefits and annuities from other employment not covered under Social Security.

To enable the administration of the GPO and WEP provisions, SSA routinely receives from OPM the entire file of active CSRS annuitants, and the claims representative has this information readily available while processing an application for benefits. The June 1996 file was made available to the Office of the Chief Actuary to match with SSA administrative record files for studying the interaction of CSRS worker annuitants with the Social Security program.

We report here the number of CSRS worker annuitants who were entitled to worker or auxiliary Social Security benefits in June 1996, and the amounts and significance of their benefits. Also included are the numbers of annuitants affected by the Windfall Elimination Provision, the Government Pension Offset, and the elimination of the minimum benefit, and the effect of these measures, along with information on the extent of Medicare enrollment among annuitants aged 65 or older.

Another focus is the extent and timing of employment covered by Social Security among annuitants. For example, how many nonbeneficiary persons are insured for benefits? How many persons have such employment after completing their Federal careers?

To the extent possible, this information is presented for all annuitants. However, some of the information, particularly information on employment covered by Social Security, is available only for a 1-in- 100 sample of annuitants.

There are several previous investigations of the interaction of CSRS annuitants with Social Security, all of which predated the implementation of the legislative solutions. …

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