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Bill repealing last-day GPO exemption signed into law
HR 743, the federal legislation to repeal the last day exemption from the Government Pension Offset, passed the U.S. House on Feb. 11, and became effective March 2 when it was signed by the President. This legislation affects teachers and other school employees subject to the GPO, which reduces Social Security spousal benefits.
With the passage of HR 743, employees can no longer avoid the reduction in benefits by working for one day in a school district or other entity that pays into both the Texas Teacher Retirement System (TRS) and Social Security. Beginning June 30, 2004, an employee must work at least 60 months participating in both TRS and Social Security immediately prior to retirement in order to qualify for the exemption. However, transitional language in effect for the next five years will allow some employees to use prior service to count toward the 60 months.
An employee whose last day of service comes within the five-year period after the effective date of the bill, and who had previous service with a school district or other entity paying into both TRS and Social Security, could use that previous service to count toward the required 60 months. Such an employee would still need to work at least the last month prior to retirement in a district paying into Social Security in order to qualify for the exemption.
Members of the Texas congressional delegation urged their colleagues to vote against HR 743, based on their objection to Section 418 that spelled out the new provisions eliminating the last-day exemption. U.S. Reps. Gene Green (D-Houston) and Martin Frost (D-Dallas) led the floor debate against the bill, with help from several other Texans. Frost was prepared to amend the bill to strip out Section 418, but the procedural move that would have allowed such an amendment failed.
