HJR 30-ELIMINATE SOCIAL SECURITY OFFSET  VICE CHAIR LYDA GREEN announced that there would be a work session until a quorum was present. Chair Dyson was not in Juneau due to travel difficulties and Senator Davis was excused. Present were Senator Wilken and Vice Chair Green when the Senate Health, Education and Social Services Standing Committee work session convened at 2:49 p.m. REPRESENTATIVE CARL GATTO, sponsor of HJR 30, explained that this legislation deals with two provisions from the Social Security Act, the Government Pension Offset and the Windfall Elimination Provision. Historically, he said he was old enough to have earned Social Security in his younger days and he had completed all of the requirements to qualify for Social Security before becoming a state worker. After becoming a state worker, Social Security was able to reduce the benefit amount owed to him because of the state not being part of the Social Security system. He told members that a lot of people will face this situation and will be just as surprised that these two provisions exist. REPRESENTATIVE GATTO provided the following testimony: Briefly the first provision, the Government Pension Offset really deals mostly with the death of a spouse. What Social Security has done pretty much in these provisions is to say that your survivor benefit will be reduced by two thirds of your government pension. In other words, the money that I earned in my government pension, which has almost nothing to do with Social Security Administration, is somehow going to be used in the calculation of my Social Security benefit. What they will do then, in the event of a death of a spouse, is reduce the Social Security benefit by two thirds of my government pension. So by example, if I was a real good government worker earning a lot of money and got a good pension, it's very possible that my spouse would get zero of my Social Security benefit. In fact it's likely my spouse would get zero. If my government pension was $3,000 they're going to say '$2,000 of that will offset your Social Security benefit.' If my Social Security benefit was less than $2,000, my spouse gets nothing. She gets to keep my $3,000 government pension, but she gets zero from Social Security. And it works, of course, in the reverse. REPRESENTATIVE GATTO continued: The other one is the Windfall Profit Provision and that essentially says the same thing in a different way ... when I retire, my Social Security benefit is reduced by a certain amount of money up to sixty percent, based on what I earned in my government pension. Madam Chair, this came as quite a surprise to me. I currently get a Social Security benefit. My benefit is in the order of $111 a month. I'm glad I am not banking on my Social Security benefit. But there are many people, many people in a situation where they absolutely depended upon a Social Security benefit. And so, what we have here in [HJR 30] is to ask our team in Washington D.C. to support the repeal of these two [provisions]. There is overwhelming support right now in Washington D.C. and we'd like to simply ask our representatives there to join in that support so that we, as one of - I think fifteen or sixteen states that are under this situation - will not have some of the older people who are retiring looking and banking on this benefit and then discovering that at any moment, at the last second, that it really will not be there. VICE CHAIR GREEN commented that she was similarly surprised when she recently came across this same issue. Before taking public testimony, she said she presumed witnesses were testifying in support of the HJR 30, and heard no response to the contrary. MR. JERRY PATTERSON, NEA-Alaska Retired, reported that the problem was extensive. There are about 7,000 retirees between the ages of 65 and 75, who are potentially affected by this; there are approximately 6,000 federal workers in the state, and about 11,000 people between the ages of 55 and 65. The coming generation will be more affected as the problem grows, so it would be prudent for Alaska to have this repealed. There is a recruiting problem concerning people recruited from outside the state; the trigger is to be vested - which is five years for state workers and eight years for teachers - and the trigger is a small amount of service, yet the penalty is large. MR. SAM TRIVETTE, President of Retired Public Employees of Alaska, representing people who have retired from both state and municipal employment in Alaska, related that prior to retirement, he had received a calculation indicating how much he would receive upon retirement; however, since retirement that amount is reduced by $500 per month. He said there are over 20,000 retirees from state or municipal government, who are not teachers and who will be similarly affected. The loss of that income translates into a large amount of money that won't be spent in Alaska's economy. In questioning why this bill was passed, he said it was tied to a reappropriation bill at the last moment, and "people, I don't think, frankly knew what they were getting into at the time." MR. TRIVETTE reported that he spoke with a Social Security expert and presented the scenario of paying into Social Security for over 25 years, before the state went out - part of that time was with the private sector and part was as a state employee - and of paying the full amount during that whole time (payments had not been reduced). If he had simply quit working when he had paid all he had to, and didn't continue working for the state, he would not be getting this reduction; he would have received that $500 per month. He said he had been a manager for the state for many years and it was difficult to recruit employees. The state informs new employees that Social Security will be reduced and this is "certainly no incentive." Many people now getting ready to retire don't even know that they are going to be hit by this. VICE CHAIR GREEN announced that with the arrival of Senator Guess there was a quorum, and she called the Senate Health, Education and Social Services Standing Committee meeting to official order at 3:00 p.m. Present were Senators Guess, Wilken, and Vice Chair Green. MS. MARIE DARLIN, legislative chairman for the National Association of Retired Federal Employees (NARFE), testified that the association has worked for repeal of these offsets since the early 90s. Many of those hurt the most by this are elderly, widowed women who are not even receiving much from federal checks. Many federal retirees have not paid Social Security but have paid into the civil service retirement system over those years; now the new retirement system does not include Social Security since the federal government has changed that option. Those who did pay Social Security for whatever other jobs they may have had over their lifetime, now find that it means nothing regarding their pension. NARFE wants this to be done away with as soon as possible because the number of people hurt by this is growing, and what was planned for is not going to be there. MS. JOANNE COTTLE, a retired state and federal employee [with NARFE} draws Social Security and said she called the Social Security Administration's "800" number this morning and asked how much the monthly benefit would be if she was not a retired federal and state employee; it would be $590 a month. She told members that she currently gets $204 a month because of this bill. VICE CHAIR GREEN asked for the will of the committee. SENATOR GARY WILKEN moved to report HJR 30 [CSHJR 30(STA) am] from committee with individual recommendations. VICE CHAIR GREEN acknowledged there being no objection, it was so ordered.