The vast majority of school districts in Texas do not participate in Social Security, and employees in those districts are entitled to Social Security benefits only if they paid into Social Security through other employment (for at least 40 quarters) or through their spouse. However, federal law reduces (or in some cases eliminates) the amount of Social Security benefits received in those cases.

If you retire from a district that does not participate in Social Security but are eligible for benefits through your spouse, the Government Pension Offset (GPO) will reduce the amount of your spousal or survivor benefits by two-thirds of the amount of your TRS pension. (See the Social Security website for a more detailed explanation.) Under previous law, employees could be exempt from the GPO if their last day of employment was in a district or other entity that participates in both Social Security and TRS. Employees whose last day of employment prior to retirement was before July 1, 2004, may have been able to qualify for this exemption. Employees who were already receiving spousal Social Security benefits prior to April 1, 2004, may still qualify for the last-day exemption.

Under a law passed in 2004, an employee must now work at least 60 months participating in both TRS and Social Security immediately prior to retirement in order to be exempt from the GPO. 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 is before March 3, 2009, and who had previous service with a school district or other entity paying into both TRS and Social Security, could count that previous service 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. The TCTA website includes an unofficial list of Texas school districts participating in Social Security at tcta.org.

If you are eligible for Social Security benefits because of previous employment in which you paid into Social Security, you may be subject to the “Windfall Elimination Provision.” This offset is not generally as severe as the GPO, but still represents a significant reduction in benefits. It is discussed online. TCTA continues to urge repeal of the offsets through our Washington lobbyist and provides updated information on the status of proposed federal legislation at tcta.org.

Web posted: 08/05/08