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This Congressional Budget Office staff memorandum examines the economic well-being of people likely to be affected by Social Security's provision for a government pension offset and analyzes options for changing the provision. It was prepared in response to a request from the Chairman of the Social Security Subcommittee of the House Committee on Ways and Means.
The memorandum was prepared by Murray N. Ross of CBO's Human Resources and Community Development Division and Paul Cullinan of the Budget Analysis Division under the direction of Nancy Gordon and Ralph Smith. Tahirih Senne Linton, Jacquelyn Vander Brug, and Karin Carr generated the data in the tables, and Kimberly Guise prepared the figures. Harriet Komisar provided valuable comments. Ronald Moore provided administrative assistance and prepared the final version of the manuscript.
Comments or questions regarding the analysis may be addressed to Murray
Ross or Paul Cullinan.
SUMMARY
The government pension offset (GPO) is a provision of Social Security that reduces spousal or survivors' benefits payable to certain government retirees. The offset applies when the benefits are based on a spouse's earnings record and not the retiree's own earnings, when the retiree's work was mainly in government employment not covered by Social Security, and when the retiree does not meet any of the criteria for exemption specified by law. The GPO effectively treats two-thirds of the amount of government pension as equivalent to Social Security and causes spousal benefits to be reduced by that amount.
This memorandum describes the GPO, its impact on Social Security beneficiaries, how the economic well-being of government retirees compares with that of other retirees, and the impact of changing or eliminating the GPO. The key findings are as follows:
This document is available in its entirety in PDF.