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Big Brother's Catch 22

Posted Sunday, November 16, 2008, at 7:45 PM

In 1961 Joseph Heller's novel, Catch 22, was published, putting a name to the illogical no-win situation which Yossarian, the main character, finds himself in as a WWII bomber pilot. The governmental rule is that all pilots must fly their mission, unless they're crazy, but if they refuse to fly their mission, that means that they're sane, so they have to fly the mission! Catch 22! The ridiculous irony is that even the catches are codified with numbers!

In the last couple of days I've been made aware of a Catch 22 that exists in our educational system. Just what we needed, right? Another glitch in the system. And this is a big one, because it involves (shhhh!) the IRS and the Social Security Administration. (Hereafter called the SSA.)

Yessiree, folks, this is Big Brother at his finest!

Let's see if I can explain this situation, as I understand it. If you know more than I do, please free to illuminate the issue. I won't be offended, I promise!

History of the issue:

It goes back to 1956, when the Public School Retirement System of Missouri (hereafter called PSRS) got permission (somehow) to have its members excluded from Social Security coverage, instead opting to run their own system. The result has been an excellent retirement system - unlike what's happened to Social Security. From what I can gather, the difference is that the legislators couldn't get their fingers into PSRS money, so - voila! - it's still there!

Okay, now things get complicated. Somewhere around 1980, Congress enacted the Windfall Elimination Provision. This was supposedly to keep retirees from "double-dipping" by collecting from both teacher retirement and social security. From what I've been told, this law applied in Missouri to teachers and railroad workers. Through this system, PSRS retirees who have to put their money into social security (because of working outside education part of the year)get back a reduced amount or none at all. Not all states do this. It would seem that the practice is peculiarly Missourian in nature. I've heard that two other states might do it.

Whew! I've been education since 1964, and I never knew any of this!!

But it gets even more complicated! Another law was passed in the 70's or 80's: It's called the Government Pension Offset. This sneaky provision kicks in when a teacher's husband or wife dies. If that spouse would have been entitled to Social Security benefits, the widow/widower cannot collect all his/her spouse's benefits. The formula goes like this: 1) Take 75% of your retirement income. 2) Subtract that amount from your spouse's benefit. 3) The remainder is yours.

What is the current issue?

The reason why all this is in the news right now is that the IRS did an audit of two Missouri school districts, reported to the SSA, and it changed its position on which Missouri public school employees are exempt from paying social security taxes.

In the past, all school district employees working in any capacity who possess a certificate issued by the Department of Elementary and Secondary Education (DESE) and who worked at least 17 hours on a regular basis were excluded from social security coverage.

On Oct. 22, 2008, the State Social Security Administrator issued a memorandum and a new interpretation of rules regarding this practice. Under the new interpretation, the only PSRS members who are excluded from Social Security contributions are those working in the positions of "teacher, teacher-secretary, substitute teacher, supervisor, principal, supervising principal, superintendent or assistant superintendent, nurse or librarian." School districts have many certified educators, such as counselors and vocational teachers, who would now be required to pay into Social Security. Also covered under this ominous rule are the extra-duty teachers, such as coaches and those other dedicated educators who give up their after-school time to work with the kids on sports or clubs. All extra-duty stipends will be subject to social security taxes.

I hate to think that all those people are working all those years for nothing, but that may be the case.

So, this is the situation, as best as I can understand it, after several days of trying to sort through the details.

If you would like to check it out, here are some links. You might have to copy & paste them, I think. I'm trying to figure out how to do hyperlinks, but I don't think I've been successful. I'm also following the instructions on how to keep those addresses from automatically double-spacing, but so far they aren't cooperating!!

* For a place to find out more, go to http://www.msta.org and http://www.mnea.org

* If you want to write your Congressman about this issue, I've included addresses below. For a form letter you can use as a guide, see http://www.msta.org/files/regions/mstaps...

You can send a letter to:

Sen. Kit Bond
274 Russell Senate Office Building
Washington, D.C., 20510
(202) 224-5721

Sen. Claire McCaskill
717 Hart Senate Office Building

Washington, D.C., 20510
(202) 224-6154

Showing most recent comments first
[Show in chronological order instead]

Pertaining to the Republican party, employers offering a 401(k) plan may make matching or non-elective contributions to the plan on behalf of eligible employees and may also add a profit-sharing feature to the plan. Since most people are aware that everyone is making less money than they used to and Social Security isn't a reliable option, what to do about retirement funds? Well, lately a lot of people are thinking of financing 401(k) contributions, or to other retirement funds, or to start an account for college funds for the kids? Well, it's a tough call. The kids can always get financial aid, or scholarships, (or jobs) and your retirement account is absolutely essential. That said, both ideas are noble enterprises, but it can sure be a real quandary -- whether to use personal loans to contribute to retirement funds, or college funds for the kids.

-- Posted by Paigea on Fri, Oct 23, 2009, at 5:50 AM

In the end, you still have to pay the withholding, whether you ever get any back upon retirement or not.

-- Posted by goat lady on Tue, Nov 25, 2008, at 7:52 AM

Well, we don't want this discussion to deteriorate into a "No, we don't!" "Yes, you do!" situation, but I certainly don't see the "choice" you're talking about. Get into another profession, perhaps? Write your Congressman?

-- Posted by goat lady on Tue, Nov 25, 2008, at 7:49 AM

Sure you have a choice. The same as you have a choice with many other decisions you make every day.

-- Posted by I.B. Le Truth on Mon, Nov 24, 2008, at 9:12 PM

Yeah, well, we don't have a choice, do we?? Uncle Sam isn't very tolerant about nonpayment of taxes.

-- Posted by goat lady on Mon, Nov 24, 2008, at 6:17 AM

If you pay in to it, you should get it because you are actually paying for other people right now. The people who are working are supporting those not working, retired or unable to work. So, pay up.

-- Posted by I.B. Le Truth on Mon, Nov 24, 2008, at 12:02 AM

Oh, hey - I do know that the GPO law about not collecting all your survivor's benefits DOES apply to the railroad workers. If a railroad worker's spouse dies, and they've been paying into Social Security, the widower can collect only the same amount as the teachers can collect. Take 75% of their retirement benefit, subtract from dead spouse's benefit - and they get what's left.

-- Posted by goat lady on Sat, Nov 22, 2008, at 8:42 PM

That's true about the railroad workers, lovebooks, but I don't know if they're required to pay into Social Security. Anybody out there who can answer that?

-- Posted by goat lady on Sat, Nov 22, 2008, at 8:37 PM

Thank you, Goat Lady! I've enjoyed being in touch with folks from "home", though I've been gone for a long time.

-- Posted by GONENOW on Sat, Nov 22, 2008, at 5:37 PM

If I'm not mistaken, railroad employees are not required by the government to pay into Social Security.

But let's pick on the teachers because they're too busy wrangling 33 kids 7 times a day and only have 18.3 minutes for lunch! They won't notice.


-- Posted by lovebooks on Sat, Nov 22, 2008, at 8:36 AM

Gonenow, you are a treasure on these blogs! Wherever you live, thank you for joining us and adding a perspective from the Outside World! If only our legislators would hear you!

-- Posted by goat lady on Fri, Nov 21, 2008, at 9:32 PM

In the state where I teach, we pay both social security and a state retirement contribution. When we retire, we draw from both. The bad thing is that too many teachers don't live long after retirement to withdraw it. The stress, excessive overtime hours, inability to take rest room breaks etc. shorten the life-span of too many wonderful people. So why do we do it? For that retirement check? It is the reward of seeing young people live better lives--the retirement or social security checks come second to knowing our lives were well-spent. My point is--whatever teachers draw after retirement is not fair compensation. Nobody has the right to withold retirement income. Come on, Missouri!

-- Posted by GONENOW on Fri, Nov 21, 2008, at 3:12 PM

Exactly, but you should pay.

-- Posted by I.B. Le Truth on Fri, Nov 21, 2008, at 10:25 AM

If you pay in to a retirement system and to social security you should receive full benefits from both.

-- Posted by mythought on Fri, Nov 21, 2008, at 9:52 AM

But is the rest of the world not allowed to draw out SS if they have a retirement plan?

What do other professions do? Do they have their own private retirement plan? Haven't I been hearing of companies who sell their employees retirement plans when they sell the business? How does that work?

-- Posted by goat lady on Thu, Nov 20, 2008, at 11:22 AM

You should have both a retirement system and social security. It is the way the rest of the world does it.

-- Posted by I.B. Le Truth on Thu, Nov 20, 2008, at 8:55 AM

Also, as we've discussed on Corey's blog, (I think), the Public School Retirement System has carefully invested its employee's money over the years to build up a secure fund. I'm not aware that the Social Security funds have been invested, have they? And they've also been "borrowed," have they not, for other projects?

Something I haven't been clear on is that the Government Pension Offset may have been a law passed by the State of Missouri, not the Feds. That's why our two senator's addresses are given by MNEA. Something could be done about that one, whereas the WEB is a Federal law, so it's pretty much a done deal.

-- Posted by goat lady on Thu, Nov 20, 2008, at 7:55 AM

Sorry....I blacked out for a moment...

I guess it's hard for me to be objective on this matter, since I'm involved in the system. Another reason why Public School Retirement is more fair than Social Security, I guess, is that we don't have to pay for someone else who can't pay.

-- Posted by goat lady on Wed, Nov 19, 2008, at 8:48 PM

Okay, Baracky Baby!

-- Posted by goat lady on Wed, Nov 19, 2008, at 8:40 PM

I don't think teachers should be penalized any at all, but I do think everyone should pay in to social security. No one organization, profession or person should be allowed to opt out. You can have any retirement system you want but you still should have to pay and of course you should be allowed to draw out. You have to pay so others that are unable to can draw a minimum. Spread the wealth.

-- Posted by I.B. Le Truth on Wed, Nov 19, 2008, at 7:57 PM

Yeah, I sorta agree about Catch 22. Some books aren't pleasant to read, but they make such an important statement that they NEED to be read. That's like The Jungle by Upton Sinclair. Most miserable book I ever read, but wonderful book to HAVE read!

Interesting observations about Civil Service Retirement. There's so MUCH to know about all this folderol. We peons can be taken advantage of so easily!!!

Ignorance is definitely NOT bliss!

-- Posted by goat lady on Mon, Nov 17, 2008, at 12:38 PM

These things apply to federal employees who worked under the old Civil Service Retirement System, also. Back in the 80's, government employees started being phased into a combination Social Security/retirement account plan. It looks as if many people will be working well past traditional retirement age, and they may end up drawing some of those benefits. I wondered when the recent crash came if it might inadvertenly benefit Social Security by forcing more workers to continue paying in rather than drawing out. By the way, I hated that book you mentioned; but it's one of my sister's favorites. Go figure...

-- Posted by gardengirl on Mon, Nov 17, 2008, at 9:46 AM

This smacks of a rip-off to me. Why would a worker be required to pay into a system from which he/she could get no benefits - unless it was simply a ploy by the Social Security Administration to get more money?

-- Posted by goat lady on Sun, Nov 16, 2008, at 9:27 PM

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Madeline DeJournett
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Madeline (Giles) DeJournett is the Advance writer for the North Stoddard Countian. A retired high school English/history teacher, she spent 32 years teaching in 5 schools in Missouri and Alaska. These days, she lives quietly with a menagerie of wild and domestic animals on 52 secluded acres in the remote Tillman hills south of Advance. She graduated from Dexter High School in 1960 and Southeast Missouri State in 1964. She can be contacted at advancensc@sbcglobal.net.
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