Social Security Fairness Act to benefit some public-service employees, but at what cost?
Accounting professor weighs the pros and cons of new law.

One of President Joe Biden’s final official acts before leaving office in January was signing the Social Security Fairness Act, which repealed two provisions that reduced or eliminated benefits for more than 3.2 million people receiving pension payments from work where they had not paid Social Security taxes.
The new law reversed the Windfall Elimination Provision and the Government Pension Offset and is expected to increase Social Security benefits for teachers and first responders in many states who paid into pension programs instead of Social Security. It also benefits federal employees covered by the Civil Service Retirement System, as well as those who receive payments from a foreign social-security system.
The Social Security Administration says the changes in monthly benefits could vary, depending on factors such as the type of benefit received and the amount of the person’s pension. Some people’s benefits won’t increase by much, while others might receive an additional $1,000 or more each month.
“Given the timing, my suspicion is that this is certainly designed to appeal to a wide range of Americans,” said Gregory T. Clifton, J.D., LLM, chair and associate professor in the Department of Accounting at Metropolitan State University of Denver. “It’s designed to appeal to the teacher unions and firefighter unions and those other public-service-type employees who are going to be impacted by this to some degree. In most states, those teacher unions and those public-service unions represent a large number of constituents.”
At the same time, he said, the new policy would also benefit the corporate executive employee who has contributed to Social Security while also being eligible for a corporate nonqualified pension.
The Social Security Fairness Act’s provisions are retroactive, meaning the Social Security Administration must adjust past as well as future benefits for millions of people. That could take a while, given the agency’s budget constraints and the complex, case-by-case calculations needed for each individual.
“(Retirees) probably won’t see those increased benefits until, if they’re lucky, sometime in 2026,” Clifton said. “I think they’re still at least a year out, just because of the challenges that the Social Security Administration is facing. You’ve got to be able to identify these folks somehow, and then you’ve got to be able to figure out how each recipient is going to be impacted and to what extent they’re going be impacted.”
The increased benefits could also have unintended consequences. “It could create additional tax liability for some taxpayers, especially if you have other income, as a lot of retired folks do,” Clifton said. “As that Social Security income credit goes up, your total income goes up.”
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The new policy might also have a direct impact for the many MSU Denver employees who contribute to 401(a) retirement plans in lieu of Social Security, he added.
Providing additional benefits to so many people will likely worsen the long-term viability of the Social Security program, Clifton predicted.
“We’re talking about a system that is, at least by a lot of estimations, approaching bankruptcy at a pretty rapid rate, a rate that seems to be growing,” he said. “I would have to imagine that this legislation accelerates the possibility of the system going bankrupt perhaps by as much as a decade.”
Clifton added that there are steps Congress could take to ensure the solvency of the Social Security program. One would be to eliminate the income ceiling beyond which taxpayers are not required to make additional contributions to Social Security. “If you completely eliminate the limit, then you’re going to be able to fund the system to a greater extent than it is currently funded.”