Equal Treatment of Public Servants Act of 2021
This bill phases in a new funding formula for determining benefit amounts under the windfall elimination provision (WEP). The WEP reduces Social Security retirement and disability benefits for those who receive pensions for certain non-covered employment.
The new formula adjusts an individual's total lifetime earnings based on the proportion of those earnings subject to Social Security payroll taxes. It applies to individuals who (1) become eligible for Social Security benefits after 2061, and (2) have earnings from non-covered service performed in a year after 1977. Beneficiaries who become eligible for benefits between 2023 and 2061 receive the higher of their benefit calculated under the existing WEP or the new formula. In addition, certain beneficiaries currently impacted by the WEP receive an additional payment.
The Social Security Administration must include non-covered earnings in Social Security account statements and must study the feasibility of partnering with certain pension systems to address data sharing issues related to non-covered pensions.
[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5834 Introduced in House (IH)]
<DOC>
117th CONGRESS
1st Session
H. R. 5834
To amend title II of the Social Security Act to replace the windfall
elimination provision with a formula equalizing benefits for certain
individuals with noncovered employment, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
November 3, 2021
Mr. Brady (for himself, Mr. Arrington, Mr. Babin, Mr. Bacon, Mrs. Bice
of Oklahoma, Mr. Burgess, Mr. Carter of Texas, Mr. Crenshaw, Mr.
Cuellar, Mr. Ferguson, Mr. Gohmert, Mr. Tony Gonzales of Texas, Mr.
Gonzalez of Ohio, Mr. Vicente Gonzalez of Texas, Mr. Gooden of Texas,
Ms. Granger, Mr. Guthrie, Mr. Hern, Mr. Hice of Georgia, Mr. Jackson,
Mr. Latta, Mr. McCaul, Mr. Murphy of North Carolina, Mr. Nunes, Mr.
Pfluger, Mr. Rice of South Carolina, Mr. Taylor, Ms. Van Duyne, Mr.
Weber of Texas, Mr. Wenstrup, and Mr. Williams of Texas) introduced the
following bill; which was referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend title II of the Social Security Act to replace the windfall
elimination provision with a formula equalizing benefits for certain
individuals with noncovered employment, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Equal Treatment of Public Servants
Act of 2021''.
SEC. 2. REPLACEMENT OF THE WINDFALL ELIMINATION PROVISION WITH A
FORMULA EQUALIZING BENEFITS FOR CERTAIN INDIVIDUALS WITH
NONCOVERED EMPLOYMENT.
(a) In General.--Section 215(a) of the Social Security Act (42
U.S.C. 415(a)) is amended by inserting after paragraph (7) the
following:
``(8)(A) In the case of an individual whose primary insurance
amount would be computed under paragraph (1) of this subsection--
``(i) who first becomes eligible for an old-age or
disability insurance benefit after 2061,
``(ii) who subsequently becomes entitled to such benefit,
and
``(iii) who has earnings derived from noncovered service
performed in a year after 1977,
the primary insurance amount of such individual shall be the amount
computed or recomputed under this paragraph.
``(B) The primary insurance amount of an individual described in
subparagraph (A), as computed or recomputed under this paragraph, shall
be the product derived by multiplying--
``(i) the individual's primary insurance amount, as
determined under paragraph (1) of this subsection and
subparagraph (C) of this paragraph, by
``(ii) a fraction--
``(I) the numerator of which is the individual's
average indexed monthly earnings (determined without
regard to subparagraph (C)), and
``(II) the denominator of which is an amount equal
to the individual's average indexed monthly earnings
(as determined under subparagraph (C)),
rounded, if not a multiple of $0.10, to the next lower multiple of
$0.10.
``(C)(i) For purposes of determining an individual's primary
insurance amount pursuant to clauses (i) and (ii)(II) of subparagraph
(B), the individual's average indexed monthly earnings shall be
determined by treating all recorded noncovered earnings (as defined in
clause (ii)(I)) derived by the individual from noncovered service
performed in each year after 1977 as `wages' (as defined in section 209
for purposes of this title), which shall be treated as included in the
individual's adjusted total covered earnings (as defined in clause
(ii)(II)) for such calendar year together with amounts consisting of
`wages' (as so defined without regard to this subparagraph) paid during
such calendar year and self-employment income (as defined in section
211(b)) for taxable years ending with or during such calendar year.
``(ii) For purposes of this subparagraph:
``(I) The term `recorded noncovered earnings' means
earnings derived from noncovered service (other than noncovered
service as a member of a uniformed service (as defined in
section 210(m)) for which satisfactory evidence is determined
by the Commissioner to be available in the records of the
Commissioner.
``(II) The term `adjusted total covered earnings' means, in
connection with an individual for any calendar year, the sum of
the wages paid to the individual during such calendar year (as
adjusted under subsection (b)(3)) plus the self-employment
income derived by the individual during any taxable year ending
with or during such calendar year (as adjusted under subsection
(b)(3)).
``(iii) The Commissioner of Social Security shall provide by
regulation or other public guidance for methods for determining whether
satisfactory evidence is available in the records of the Commissioner
for earnings for noncovered service (other than noncovered service as a
member of a uniformed service (as defined in section 210(m))) to be
treated as recorded noncovered earnings. Such methods shall provide for
reliance on earnings information which is provided to the Commissioner
by employers and which, as determined by the Commissioner, constitute a
reasonable basis for treatment of earnings for noncovered service as
recorded noncovered earnings. In making determinations under this
clause, the Commissioner shall also take into account any documentary
or other evidence of earnings derived from noncovered service by an
individual which is provided by the individual to the Commissioner and
which the Commissioner considers appropriate as a reasonable basis for
treatment of such earnings as recorded noncovered earnings.
``(D) Upon the death of an individual whose primary insurance
amount is computed or recomputed under this paragraph, such primary
insurance amount shall be computed or recomputed under paragraph (1) of
this subsection.
``(E) In the case of any individual whose primary insurance amount
would be computed under this paragraph who first becomes entitled after
1985 to a monthly periodic payment made by a foreign employer or
foreign country that is based in whole or in part upon noncovered
service, the primary insurance amount of such individual shall be
computed or recomputed under paragraph (7) or paragraph (1), as
applicable, for months beginning with the first month of the
individual's initial entitlement to such monthly periodic payment.''.
(b) Conforming Amendments.--Section 215(a)(7)(A) of such Act (42
U.S.C. 415(a)(7)(A)) is amended--
(1) in clause (i)--
(A) by striking ``after 1985'' and inserting
``after 1985 and before 2062''; and
(B) by striking ``or'' at the end;
(2) in clause (ii)--
(A) by striking ``after 1985'' each place it
appears and inserting ``after 1985 and before 2062'';
and
(B) by adding ``or'' at the end;
(3) by inserting after clause (ii) the following:
``(iii) is an individual described in paragraph (8)(E),'';
and
(4) by striking ``hereafter in this paragraph and in
subsection (d)(3)'' and inserting ``in this paragraph,
paragraphs (8) and (9), and subsection (d)(3)''.
(c) Effective Date.--The amendments made by this section shall
apply with respect to monthly insurance benefits payable on or after
January 1, 2023.
SEC. 3. BENEFIT CALCULATION DURING TRANSITION PERIOD.
(a) In General.--Section 215(a) of the Social Security Act (42
U.S.C. 415(a)), as amended by section 2, is further amended by
inserting after paragraph (8) the following:
``(9) In the case of an individual whose primary insurance amount
would be computed under paragraph (1) of this subsection--
``(A) who first becomes eligible for an old-age or
disability insurance benefit after 2022 and before 2062,
``(B) who subsequently becomes entitled to such benefit,
and
``(C) who has earnings derived from noncovered service
performed in a year after 1977,
the primary insurance amount of such individual shall be the higher of
the amount computed or recomputed under paragraph (7) without regard to
this paragraph or the amount that would be computed or recomputed under
paragraph (8) if the individual were an individual described in
subparagraph (A) of such paragraph.''.
(b) Conforming Amendment.--Section 215(a)(7)(A) of such Act (42
U.S.C. 415(a)(7)(A)), as amended by section 2(b), is further amended by
striking ``shall be computed or recomputed'' and inserting ``shall,
subject to paragraph (9), be computed or recomputed''.
(c) Effective Date.--The amendments made by this section shall
apply with respect to monthly insurance benefits payable on or after
January 1, 2023.
SEC. 4. ADDITIONAL MONTHLY PAYMENT FOR INDIVIDUALS WHOSE BENEFIT AMOUNT
IS REDUCED BY THE WINDFALL ELIMINATION PROVISION.
(a) In General.--Section 215(a) of such Act (42 U.S.C. 415(a)), as
amended by sections 2 and 3, is further amended by adding at the end
the following:
``(10)(A) For any month beginning at least 270 days after the date
of enactment of the Equal Treatment of Public Servants Act of 2021, the
Commissioner of Social Security shall, subject to subparagraphs (C) and
(D), make an additional monthly payment of $100 to each individual who
is an eligible individual for such month, and an additional monthly
payment of $50 to each individual (other than an eligible individual)
who is entitled to a benefit under section 202 for such month on the
basis of the wages and self-employment income of such eligible
individual.
``(B) For purposes of this paragraph, the term `eligible
individual' for a month means an individual who--
``(i)(I) first becomes eligible for an old-age or
disability insurance benefit under this title before 2023, or
``(II) is an individual described in paragraph (8)(E), and
``(ii) is entitled to an old-age or disability insurance
benefit under this title for such month based on a primary
insurance amount that was computed or recomputed under
paragraph (7) (and not subsequently recomputed under any other
paragraph of this subsection).
``(C) In any case in which this title provides that no monthly
benefit under section 202 or 223 shall be paid to an individual for a
month, no additional monthly payment shall be paid to the individual
for such month. This subparagraph shall not apply in the case of an
individual whose monthly benefit under section 202 or 223 is reduced,
regardless of the amount of the reduction, based on the individual's
receipt of other income or benefits for such month or the application
of section 203(a) or due to the adjustment or recovery of an
overpayment under section 204.
``(D)(i) An individual is not entitled to receive more than one
additional monthly payment for a month under this paragraph.
``(ii) An eligible individual who is entitled to a benefit under
section 202 on the basis of the wages and self-employment income of
another eligible individual for a month shall receive an additional
monthly payment under this paragraph in the amount of $100 for such
month.
``(E) Except for purposes of adjustment or recovery of an
overpayment under section 204, an additional monthly payment under this
paragraph shall not be subject to any reduction or deduction under this
title.
``(F) Whenever benefit amounts under this title are increased by
any percentage effective with any month as a result of a determination
made under subsection (i), each of the dollar amounts in subparagraph
(A) shall be increased by the same percentage for months beginning with
such month.''.
(b) Effective Date.--The amendments made by this section shall
apply with respect to monthly insurance benefits payable for months
beginning at least 270 days after the date of enactment of this Act.
SEC. 5. REPORTING OF NONCOVERED EARNINGS ON SOCIAL SECURITY ACCOUNT
STATEMENTS.
(a) In General.--Section 1143(a)(2) of the Social Security Act (42
U.S.C. 1320b-13(a)(2)) is amended--
(1) by redesignating subparagraphs (B) through (E) as
subparagraphs (C) through (F); and
(2) by inserting after subparagraph (A) the following:
``(B) the amount of earnings derived by the
eligible individual from service performed after 1977
which did not constitute employment (as defined in
section 210), not including service as a member of a
uniformed service (as defined in section 210(m)), as
shown by the records of the Commissioner at the date of
the request;''.
(b) Effective Date.--The amendments made by this section shall
apply with respect to Social Security account statements issued on or
after January 1, 2023.
SEC. 6. STUDY ON PARTNERING WITH STATE AND LOCAL PENSION SYSTEMS.
(a) Study.--
(1) In general.--The Commissioner of Social Security shall
study and test the administrative feasibility of partnering
with State and local pension systems, or other governmental
entities, to improve the collection and sharing of information
relating to State and local noncovered pensions.
(2) Coordination with state and local pension systems.--In
conducting the study described in paragraph (1), the
Commissioner shall coordinate with State and local pension
systems that reflect the diversity of systems and individual
experiences to explore the development of automated data
exchange agreements that facilitate reporting of information
relating to noncovered pensions.
(b) Report.--The Commissioner of Social Security shall conclude the
study described in subsection (a) not later than 4 years after the date
of enactment of this Act. As soon as possible after conclusion of the
study and not later than 4\1/2\ years after the date of enactment of
this Act, the Commissioner shall submit to the Committee on Ways and
Means of the House of Representatives and the Committee on Finance of
the Senate a report on the results of the study. Such report shall
include the following:
(1) A discussion of how the automated data exchange
agreements could be implemented to cover noncovered pensions
nationally, including the range of implementation timelines
across State and local pension systems, or with other
governmental entities.
(2) An analysis of the barriers to developing automated
data exchange agreements and lessons learned that can help
address these barriers.
(3) A description of alternative methods for obtaining
information related to noncovered pensions, and an analysis of
the barriers to obtaining noncovered pension data through such
methods.
(4) An explanation of how coverage information is obtained
by the Social Security Administration when an individual
purchases service credits to apply to a new covered or
noncovered pension after moving from another covered or
noncovered pension within the State or in another State.
(5) An estimate of the total amount, as of the date of the
enactment of this Act, of noncovered pensions not reported to
the Social Security Administration as a result of noncompliance
with voluntary reporting policies.
(c) State and Local Pension Information To Be Requested by the
Commissioner.--Section 202 of the Social Security Act (42 U.S.C. 402)
is amended by inserting after subsection (l) the following:
``(m) State and Local Pension Information To Be Requested by the
Commissioner.--
``(1) The Commissioner may partner with States to request
information, including the information specified in paragraph
(2), with respect to any designated distribution (as defined in
section 3405(e)(1) of the Internal Revenue Code of 1986) from
an employer deferred compensation plan (as defined in section
3405(e)(5) of such Code) of the State (or political subdivision
thereof) to a participant of such plan in any case in which any
portion of such participant's earnings for service under such
plan did not constitute `employment' as defined in section 210
for purposes of this title.
``(2) The information specified in this paragraph is the
following:
``(A) The name and Social Security account number
of the participant receiving the designated
distribution.
``(B) The dollar amount of the designated
distribution and the date paid.
``(C) The date on which the participant initially
became eligible for a designated distribution under the
plan and, if different, the date of payment of the
initial designated distribution.
``(D) The dates of each period of service under the
plan that did not constitute `employment' as defined in
section 210 for purposes of this title, and the dates
of any other period of service under the plan.''.
(d) Definitions.--In this section--
(1) the term ``noncovered pension'' means a pension any
part of which is based on noncovered service (within the
meaning of section 215(a)(7) of the Social Security Act (42
U.S.C. 415(a)(7))); and
(2) the term ``covered pension'' means any other pension.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
Referred to the Subcommittee on Social Security.
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