I am far from an expert on this but it seems like something is missing from that scenario. Granted that this is just based on doing simple tax returns for relatives but the only things I’ve encountered from the SS side are these:
Your benefits are tied to contributions. If you work for 15 years as a lawyer, you are probably paying the max since contributions are capped at just over $100K (currently). If you quit working as a lawyer and teach via a union that has an exemption, you cease to pay more in and in effect reduce what you would have gotten relative to continuing to work.
If you have income over a threshold while drawing SS, your SS benefits are taxed but that is an IRS action not a SS action.
Are you saying that you have encountered a situation where SS is saying that your benefit would be X (calculated based on contributions, normal retirement not disability because there are different rules there) but because you are getting something else your benefit is a lower amount - directly, not just in effect?
Noted Chefguy’s replay after I posted. That section he quotes does imply that your social security benefit based on contributions is directly impacted by pensions earned while working in a SS exempt job. I suspect that is part of the deal that allows organizations to opt out of SS.
Teachers are by far the largest group that falls into that category, but yes, it applies to some others as well. The point is that it’s not that you receive less because you didn’t pay in as much: you receive less because you have a pension. From your same cite:
That is not the same thing as saying “If you pay in less because you spent some years working in a non-social security paying job, you may be entitled to fewer benefits”. It’s saying that a different formula is applied to the same earnings information:
This info sheet describes one situation where social security is offset by another pension. The key difference from the post by Saint Cad is that it specifies offset due to govenment pensions from work that was exempt from social security.
It is not that teachers are being singled out. It is that a group, frequently teachers but not always, said that they didn’t want to participate in the social security system and the terms for not participating was acceptance of the offset.
I guess the answer is that teacher’s have their social security reduced because that is what they signed up for.
Many unions do this same thing, opting for higher contributions to a retirement fund. I had one union equipment operator retire at $80K a year. The most you can get out of SS is just south of $30K, as I recall.
First of all, it is not a choice. State pension plans are mandated and in many states, you have to pay BOTH pension and SS. So those teachers are REQUIRED to pay into both systems but only get the benefit of one. Is that fair?
I have all of my credits for SS but will have it reduced because I have a second career as a teacher. So I CHOSE to be part of the SS system - at least to the minimum required by the SSA to get benefits like everyone else that gets full benefits.
I’m certainly willing to have my ignorance fought here but you cite a senior citizen advocacy website that says one thing and I countered with a SS run website that says another.
The question seems to be if the person has a pension earned at a job that was exempt from SS.
That is an option for the organization (teacher’s union, state government) although the individual doesn’t have the choice.
Do you have a cite showing where someone earned a pension at a job, paid SS at the same job and had their SS reduced as a result.
That’s not how it works. If you pay into a state pension plan and SS for the same job,( as I do) , you can collect both. The SS benefit is reduced (not eliminated only if you pay into the state pension for one job which is not covered by SS and into social security for another job.
Regarding the teacher’s and SS issue, there are lots of people who would gladly give up SS in exchange for having that money to put in self-maanaged retirement accounts. Some of those people would regret it when retirement comes around and some would be ahead of the game.
I’d have probably invested it all in lottery tickets and porn. :dubious:
Bolding mine. This has absolutely nothing to do with the employee’s prior service. The govt will be paying the contractor set fees regardless of who their employees are, or their past service. In this particular example, it is actually a great benefit to both the government and the contractor because they get an experienced employee who already knows the ropes.
Generally higher cost for outsourcing is also a commonly held misconception. Keeping generic services like IT, security and transportation in-house incurs far greater direct expense over the long term. Personnel and health care costs are by far the two biggest budget items for just about any organization that employs people, government or not.
There’s a Dilbert cartoon where the boss says “I plan to save money by outsourcing our IT services this year. Then next year, I will save more money by brining the services in-house.” Save Money Outsourcing
The advantage of contractors is the flexibility and lack of committment. If you have a job that requires a specific skill set and likely is limited time, you can get what you want in a hurry by bypassing the regular HR channeels, and then shed those workers when necessary.
Really, contracting today has become a way to bypass management restrictions about the number of employees a department can have. Contractors are not employees, don’t show up in headcount, and can be dismissed at will unlike regular employees, especially unionized government employees.
It allows the employer to treat serious professionals like those day labourers who hang out at the corner looking for a job today; great if you are a serious in demand professional with endless offers, not good if it’s just a way for some overpaid fat cat to make his bottom line look good by paying you half what he used to, and no benefits.
I like Dilbert as much as the next guy, and ofttimes see it spot on target. But we are talking about “government contracting” and the fact is the government contracts for the bulk of it’s generic support services, of which IT is one of many, and it does so at great cost savings to the taxpayer. Lest you forget, some large portion of the contracting population are employees with benefits that simply come from their employers, be it a large IT firm, defense industrial giant or small staffing agency. You may be be confusing the terms “contractors” with “consultants.”
Employee costs be they contractor or in-house will be borne one way or the other by the employer. The savings from government outsourcing come from long term costs such as pensions, health benefits, HR and management overhead. The cost from Dilbert-type examples like given above come from brain dead management. That phenomenon is not peculiar to public or private sector organizations.
If you mean any one with any ability to affect that change I would say “No”. If you are just talking about on this intellectually elite message board then it was right there in the OP. Not that he doesn’t deserve it, just that it is the public interest to suspend it while he/she is working as a contractor.
You misunderstand him. He’s not saying the board is correct: he’s just saying that if you want to see someone argue that position, well, someone already has argued that position–the first post. He’s not agreeing with it, he’s just pointing out that the point was made. He’s using “intellectually elite” somewhat sarcastically, suggesting that in this sort of environment you can find people (like the OP) who will say that, but that most people are too tactful to make the argument in a less private forum.
