OLR Research Report

September 7, 2006 2006-R-0547

(Revised September 28, 2006)


Public school teachers in Connecticut are not covered by Social Security for their public school teaching service. Teachers and school districts make no contributions to the Social Security system for that work and teachers cannot collect benefits based on it. Instead, the state provides teachers with retirement benefits through the state Teachers' Retirement System (TRS).

This report answers frequently asked questions about (1) why teachers are not covered, (2) other states that have similar Social Security exclusions, (3) federal benefit reductions that apply when teachers qualify for Social Security from other employment, and (4) what the state would have to do to include teachers under Social Security.


When Congress passed the Social Security Act in 1935, it excluded federal, state, and local government employees from mandatory coverage. The exclusion for state and local public employees was based on constitutional concerns about whether the federal government could impose taxes on state governments. In the early 1950s, Congress passed a law that allowed state and local government employees to be covered if they voluntarily chose coverage in a referendum. The then-members of the Teachers' Retirement System voted against joining the Social Security system. In 1959, at the request of the Connecticut Education Association, the General Assembly prohibited TRS members from holding another referendum (CGS 5-158(d)). The ban on Social Security coverage for Connecticut teachers remains in place.


Fourteen states, including Connecticut, do not provide Social Security coverage for teachers. These states have so-called “independent” retirement systems for teachers and, in some cases, other public employees.

The 14 states with independent retirement systems for teachers are:
















Retired teachers may be eligible for Social Security (1) if they have enough other work covered by Social Security to qualify or (2) through a spouse's work. But in such cases, their Social Security benefits are reduced because of their TRS pensions. The spousal benefit reduction is called the “government pension offset” and the reduction in benefits for other work is called the “windfall elimination provision.”

These benefit reductions are required by federal law and the General Assembly has no authority to change them. They are designed to keep the Social Security system from paying people benefits that are higher than their financial circumstances warrant because most of their earnings are outside the Social Security system.

Government Pension Offset (GPO)

The GPO reduces Social Security spousal benefits by two-thirds of the monthly benefit from any government pension the spouse receives for work not covered by Social Security. Even if a spouse takes her government pension in a lump sum, Social Security will nevertheless calculate a monthly benefit amount and use it to offset her Social Security spousal benefit. If the government pension is high enough, it can offset the entire Social Security benefit.

For example, suppose a teacher receives a $1,000-per-month TRS pension benefit and is also eligible for $600 per month in Social Security spousal benefits based on her husband's employment. Under the GPO requirement, the pension offset amount is $660 (two-thirds of $1,000) per month. Since the offset is greater than the Social Security spousal benefit, the teacher receives no Social Security.

The GPO equalizes public and private sector workers for purposes of collecting spousal benefits. The Social Security law has always required that a person's benefit as a spouse, widow, or widower be offset dollar-for-dollar by the benefits he or she earns from his or her own work. Thus, for example, a woman who earns an $800 per month Social Security benefit based on her own earnings cannot also collect a $500 per month spousal benefit based on her husband's Social Security record. But before the GPO was passed, a woman who received a pension for work in a government job not covered by Social Security could collect both the pension and a full Social Security spousal benefit because her government earnings and pension did not show on Social Security's records.

Congress enacted the GPO in 1977. It applies to anyone who qualifies for a TRS pension on or after December 1, 1982.

Windfall Elimination Provision (WEP)

The WEP modifies the formula used to figure Social Security benefits for someone who has earned a pension from noncovered employment and also qualified for Social Security based on a brief work history in covered positions. Social Security's benefit formula redistributes benefits so lower-paid workers get a higher return from the system than better-paid workers. It does so by replacing a higher proportion of a low-paid worker's pre-retirement earnings. Low-paid workers receive a benefit that replaces about 55% of pre-retirement pay while a higher-paid worker's benefit replaces only about 25%. Because wages from noncovered employment do not show on Social Security's records, before the WEP was established, workers entitled to state and local government pensions from noncovered employment appeared to be low-paid and their Social Security benefit was calculated on the subsidized basis, giving them an undeserved “windfall.”

In 1983, Congress passed the WEP, which modifies the benefit formula for those with government pensions from noncovered employment. Instead of replacing 90% of the first $656 of the person's normal wages, 32% of the next $3,995, and 15% of the remainder, which is the usual formula, the windfall provision replaces only 40% of the first $656, thus reducing the overall benefit.

For example, a worker not receiving a TRS pension whose average covered earnings were $2,000 per month would be eligible for a Social Security benefit of $1,030 compared to a Social Security benefit of $712 per month for a TRS member with the same covered earnings. (These Social Security amounts apply for a worker who turned age 66 in 2006. They are adjusted annually.)

There are several exceptions to these rules, including one for people who have at least 30 years of “substantial earnings” in a covered job. In addition, the Social Security WEP reduction cannot be more than 50% of any pension benefits attributable to uncovered earnings after 1956.

The windfall provision applies to TRS members who become eligible for a pension on or after January 1, 1986. Because of a four-year phase-in, the full effect applies to those who become eligible for TRS pensions after December 30, 1989. The Social Security Administration provides an online calculator that allows those with pensions from noncovered work to calculate the WEP's effect on their Social Security benefit.


Proposals to repeal or modify the Social Security benefit offsets have been introduced in the last several Congressional sessions, but none has been successful. According to the Social Security Administration, the 10-year cost of repealing the WEP is $29.7 billion, while eliminating the GPO would cost an estimated $32.2 billion over 10 years.

Although repeal efforts have not succeeded, Congress made two modifications in 2004.

P.L. 108-203 closes a loophole that allowed some non-Social Security member employees to become exempt from the government pension offset provision by working for a day or two immediately before retiring in a job covered by both (a) the government system that will be paying their pension benefits and (b) Social Security. Under the new law, in order to be exempt from the offset, a government employee who retires on or after July 1, 2004 must work in a job covered by both systems for at least five years immediately before retiring.

The law also requires government employers to notify non-covered employees hired on or after January 1, 2005 of the potential effect of non-covered work on their Social Security benefits. In Connecticut, this requirement applies to a person who goes into teaching after previously working at a job that contributed to Social Security. Under the new law, the new non-contributing employer is required to warn the employee that their new position could result in a reduction in Social Security benefits.


Including Connecticut teachers in the Social Security system would be a complex, multi-step process.

Any plan that merely adds Social Security benefits on top of existing TRS benefits would be extremely expensive both for the state or local school districts and for TRS members because of Social Security's contribution requirements. Active teachers currently contribute 6% of monthly salary to TRS for their own retirement, plus 1.25% for health insurance for retired teachers and 1.45% for Medicare, for a total contribution of 8.7%. The state's TRS contribution is 12.5% of teacher payroll (3.01% for normal retirement cost and 9.49% for accrued unfunded liability). School districts currently make no contribution for teachers' retirement.

Social Security requires employers and employees to each contribute 6.2% of the first $90,000 of each employee's annual salary. If these percentages were added to current TRS contributions, teachers' total contributions would rise to nearly 15%. School districts, which currently pay nothing, pay the 6.2% employer contributions. If the state agreed to make the employer payments, its total contribution would rise to 18.7%.

Faced with these costs and also because the resulting unadjusted total benefits for retired teachers (TRS benefit plus Social Security) could exceed 100% of pre-retirement pay, it is likely that the state would seek to redesign the teachers' retirement plan to offset some of its benefits with Social Security benefits. TRS benefits and contribution rates would have to be reconfigured to accomplish this. In Connecticut and other states, government pension plans that are coordinated with Social Security commonly accrue benefits at a lower annual rate than independent plans. The difference is evident from a comparison of benefits from the Connecticut TRS (independent) with those available from Tiers II and IIa of the Connecticut State Employees Retirement System (SERS), which is coordinated with Social Security.

Table 1 shows the hypothetical annual benefits available under the TRS and the SERS Tier II and IIA defined benefit plans for a regular employee retiring at age 60 with 30 years of service with various final salaries. The benefits shown are for the maximum benefit payout and assume the plan member takes no reduction to enable benefits to continue to a surviving spouse or beneficiary after his death.

Table 1: Annual Pension Benefit At Age 60 with 30 Years of Service

Final Average Salary


SERS Tier II and IIA













To avoid disrupting retirement plans for active teachers, any redesigned TRS plan coordinated with Social Security would probably be established as a separate “tier” in the TRS. The new tier would likely be mandatory for new teachers first hired on or after a specific date. The state might also give certain active teachers the option to transfer to the new tier under certain conditions. Thus, the new plan would take several years to be fully phased in. The state used similar mechanisms to establish different benefit plans within the State Employees Retirement System and the Municipal Employees Retirement Fund. The state also established new tiers or funds within these systems when their members joined Social Security and their benefits were coordinated with the Social Security system.

Since the TRS is a statutory pension plan and is not subject to collective bargaining, changes in plan design, benefits, and contribution rates would require legislation. The General Assembly would also have to repeal prohibitions against TRS members participating in Social Security and against TRS members holding a referendum on the question. A majority of TRS members would have to approve Social Security participation in the referendum. Finally, once the coordinated plan was implemented, the General Assembly would be obliged to appropriate sufficient money each year to pay the Social Security employer contributions for the covered teachers in addition to the actuarially recommended contributions to fund the TRS itself.

Prepared by Judith S. Lohman, Chief Analyst