Civil servants and Social Security taxes

This post has been updated. See below for details.

Amid the news coverage of Detroit’s recent bankruptcy filing, Michael thought he heard something about public-sector workers there not paying Social Security taxes.

What’s up with that? Aren’t all workers, Michael asked, obliged to pay into the federal retirement program?

Good question, especially in light of the fact that Social Security will be trillions of dollars in the hole over coming decades unless something is done to bolster the program’s finances.

So what obligation do civil servants have when it comes to Social Security? Check out today’s Ask Laz video for the answer.

If you have a consumer question of your own, email me at asklaz@latimes.com or contact me via Twitter using the hashtag #AskLaz.

Updated, 1:46 p.m. Aug. 12: This a complex stuff, and the video might be misleading to some because of what wasn’t said. Beginning in the 1950s, state and local governments were able to choose whether their workers would participate in Social Security.

Since 1986, all new state and local government workers have been required to pay 1.45% of their income toward Medicare. Since 1991, most state and local government workers have been required to join Social Security if they do not have an alternative pension plan.

There’s also what’s known as the Windfall Elimination Provision for state and local government workers who may have paid into Social Security for at least 10 years before joining the public sector. In such cases, Social Security benefits received by these individuals will be reduced according to established formulas.