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Re: Repealing the Social Security Windfall Elimination Provision And Pension Offset 2017 Legislation

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Message 91 of 110

@GailL1 wrote:

@BarbaraS357124

 

I have no doubt that the Windfall Elimination Provision needs some work - but that is the problem - the formula that it is used to compute any benefit.  The old method did not work because it was TOO generous, the new one maybe TOO punitive, maybe for some.  However, even the legislation that has been proposed is gonna still leave some high and dry.

 

I contend that the only way this may be fixed is by some special computation done as an exception, yes, perhaps manually, on a per person basis when this situation is apparent.  It would only make a substantial difference if the affected person has many years of working under the SS system with substanial earning.  The bend ponts now used to figure the PIA ( primary insurance amount ) from the AIME ( Average Indexed Monthly Earnings ) would have to be adjusted without giving the progressive benefit of a low income earner, as is normally done on a person who has worked their career under a job covered by the SS system.

 

There is NO other method that can produce a fair SS benefit because this situation is an outlier from regular benefits.  How much difference it would then make, figured this way without the progressive formula - I doubt too much.

 

TIME.com 04/22/2015 - This Little-Known Pension Rule May Slash Your Social Security Benefit

 

THIS IS THE PROBLEM >>>>>> The Social Security benefits calculating program uses a progressive formula that aims to return the highest amount to the lowest-earning workers—the same idea that drives our system of income tax brackets.

 

It is a complex formula, but here is the upshot: Without the WEP, a worker who had just 20 years of employment covered by Social Security, rather than 30, would be in position to get a much higher return because of those brackets.

 

. . . . Just because a person worked only a portion of their career with Social Security-covered employment, they should not be benefiting by getting a higher rate of return.

 

That was what was happening under the previous rule, under the regular computation and thus the reason why the WEP was initiated in the 80's.

 

Earlier in this thread I gave an example of a person who understood all the WEP and planned accordingly - He worked under the SS system for 30 years - early on, he worked for an employer under the system and then he became self-employed under which his earning were under the SS system at the same time he was working for a local school system.  So, he earned a nice pension from the school system AND worked 30 years with substantial earnings under the SS system - the WEP does not affect him at all.

 

If you have 30 years of Social Security-covered employment with somewhat of a minimum required substantial earnings, no WEP is applied.  Below that, a sliding WEP scale is applied.

 

The maximum loss is set at 50% of whatever you receive from your separate pension, so if that is relatively small, the WEP effect will be minimal.

 

Can you do anything to avoid getting whacked by WEP? Working longer in a Social Security-covered job before retiring might help. Remember, you are immune to the provision if you have 30 years of what Social Security defines as “substantial earnings” in covered work.

 

ALL Retirement income of whatever type REQUIRES Planning - Social Security, Pension, Tax-deferred plans, Non-tax deferred plans, where monies are invested and exposure to any gains or losses.

SSA: Windfall Elimination Provision explained - includes historic chart of "substantial earnings:

 

 

 


The most you can get is 90% of your Social Security. This bit about them paying you your Social Security as if you are a low income wage earner is baloney. They are calculating it on quarters worked. I took the amount I make at my part time job $3800 and put it every year from 1972 to 2011 and I get $700 a month. But with my actual earnings I get 518. It seems to me they should be able to figure ones Social Security based on quarters paid. I  would even be okay with if they took the Social Security taxs I and my employer paid then applied interest earned on for the past 35 years.

Then took the amount and divided by life expectancy. 

Like the other poster said other companies have pension plans fot their employees so why are they not penalized. Why are State employees penalized their certainly goes in a different account and has no affect on the Federal budget. My money I paid into CSRS went into a different account. Personally I think any money earned before the law went into affect should be exempt from the formula. 

Simple fact is  SS was short of money in 1983 so they decided the fix it is keep some peoples Social Security. 

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Re: Repealing the Social Security Windfall Elimination Provision And Pension Offset 2017 Legislation

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Message 92 of 110

@BarbaraS357124

 

I have no doubt that the Windfall Elimination Provision needs some work - but that is the problem - the formula that it is used to compute any benefit.  The old method did not work because it was TOO generous, the new one maybe TOO punitive, maybe for some.  However, even the legislation that has been proposed is gonna still leave some high and dry.

 

I contend that the only way this may be fixed is by some special computation done as an exception, yes, perhaps manually, on a per person basis when this situation is apparent.  It would only make a substantial difference if the affected person has many years of working under the SS system with substanial earning.  The bend ponts now used to figure the PIA ( primary insurance amount ) from the AIME ( Average Indexed Monthly Earnings ) would have to be adjusted without giving the progressive benefit of a low income earner, as is normally done on a person who has worked their career under a job covered by the SS system.

 

There is NO other method that can produce a fair SS benefit because this situation is an outlier from regular benefits.  How much difference it would then make, figured this way without the progressive formula - I doubt too much.

 

TIME.com 04/22/2015 - This Little-Known Pension Rule May Slash Your Social Security Benefit

 

THIS IS THE PROBLEM >>>>>> The Social Security benefits calculating program uses a progressive formula that aims to return the highest amount to the lowest-earning workers—the same idea that drives our system of income tax brackets.

 

It is a complex formula, but here is the upshot: Without the WEP, a worker who had just 20 years of employment covered by Social Security, rather than 30, would be in position to get a much higher return because of those brackets.

 

. . . . Just because a person worked only a portion of their career with Social Security-covered employment, they should not be benefiting by getting a higher rate of return.

 

That was what was happening under the previous rule, under the regular computation and thus the reason why the WEP was initiated in the 80's.

 

Earlier in this thread I gave an example of a person who understood all the WEP and planned accordingly - He worked under the SS system for 30 years - early on, he worked for an employer under the system and then he became self-employed under which his earning were under the SS system at the same time he was working for a local school system.  So, he earned a nice pension from the school system AND worked 30 years with substantial earnings under the SS system - the WEP does not affect him at all.

 

If you have 30 years of Social Security-covered employment with somewhat of a minimum required substantial earnings, no WEP is applied.  Below that, a sliding WEP scale is applied.

 

The maximum loss is set at 50% of whatever you receive from your separate pension, so if that is relatively small, the WEP effect will be minimal.

 

Can you do anything to avoid getting whacked by WEP? Working longer in a Social Security-covered job before retiring might help. Remember, you are immune to the provision if you have 30 years of what Social Security defines as “substantial earnings” in covered work.

 

ALL Retirement income of whatever type REQUIRES Planning - Social Security, Pension, Tax-deferred plans, Non-tax deferred plans, where monies are invested and exposure to any gains or losses.

SSA: Windfall Elimination Provision explained - includes historic chart of "substantial earnings:

 

 

 

* * * * It's Always Something . . . Roseanne Roseannadanna
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Re: Repealing the Social Security Windfall Elimination Provision And Pension Offset 2017 Legislation

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Message 93 of 110

This should be a no brainer as far as repealing the WPO & GPO.  This issue crosses party lines.   Our teachers and other service providers give their whole lives and only want what’s fair.  No one is asking to get money from SS security if they haven’t contributed.

 

In the majority of cases, like my own, people have put into BOTH Social Security and pensions.  People in the private sector can get both at retirement. Why should teachers or other service providers be any different. Why is that considered double dipping when business executives do it all the time.

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Re: Repealing the Social Security Windfall Elimination Provision And Pension Offset 2017 Legislation

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Message 94 of 110

@LonnieC924336 wrote:

I am losing over $300 a month because of this tax.I get two partial checks instead of a full retirement. i worked 24 years for s.s. and 19 years for the school system.I got cheated Big Time.


You could work for (6) more years, earning what the government deems to be substantial earnings

under  a job covered by the SS system and the WEP would go away -   Substantial earnings has also a definition under the SS system - defined by year - in 2018, a bit less than $ 2000 a month - but the figure is actually a yearly figure.

 

SSA Windfall Elimination Provision

from the link ~

If you paid Social Security tax on 30 years of substantial earnings you are not affected by WEP.

 

There is also a chart of the "substantial earnings" by year in this pamphlet (above link).

 

Sorry can't help you with your school system pension - that is a local matter.

 

 

 

 

* * * * It's Always Something . . . Roseanne Roseannadanna
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Re: Repealing the Social Security Windfall Elimination Provision And Pension Offset 2017 Legislation

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Message 95 of 110

I am losing over $300 a month because of this tax.I get two partial checks instead of a full retirement. i worked 24 years for s.s. and 19 years for the school system.I got cheated Big Time.

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Re: Repealing the Social Security Windfall Elimination Provision And Pension Offset 2017 Legislation

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Message 96 of 110
The system knows how to tell the difference between a lifetime low income wage earner and someone who only worked 10 years. I tried an experiment. I plugged in $3700 for each year from 1971-2018. My benefit was $760. Doing it with my actual years and income I get $518. So it goes to show the theory behind WEP is flawed. They stole a days pay 3 out 4 years on top of eliminating a good chunk of our Social Security. And what about folks that after 20 years gave up a good career to teach expecting they would get their Social Security.
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Re: Repealing the Social Security Windfall Elimination Provision And Pension Offset 2017 Legislation

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Message 97 of 110

I have all required quarters and more. I paid into Social Security both before and after I worked for the Government. I sorta of understand what you are saying but on the other hand why can some who worked the same amonunt of time with the same number of quarters get all their Socila Security and I can't.  I do not expect to get what someone who worked 35-40 years but I would like more then the 40% they might give me.My Civil Service Retiremrnt went into a different pot of money. Same for City and State Workers. Social Security has had my money since 1981 and I am sure they have made plenty of interest off it. The real issue is not double dipping but the fact Congress has been using Social Security to pay for stuff.  

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Re: Repealing the Social Security Windfall Elimination Provision And Pension Offset 2017 Legislation

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Message 98 of 110

@l508156s wrote:

If you put money in 2 seperate banks are you denied the use of funds from one? No. But this is what the WEP does to a number of workers who paid into both Social Security and a pension. What I would get without the WEP is pittance but with it poverty. I hope the RTTA and Mass Retired Teachers and the NEA can get congress to do something and either repeal or change the formula. 


 

@l508156s

It is not like a bank account - more like an insurace policy.  There is no SS account just for you where your premiums are credited.  A persons SS benefit is figured on the amount of time they have made contributions to the program and what their average wages were during that entire time.

 

How you qualify for retirement benefits?

When you work and pay Social Security taxes, you earn
“credits” toward Social Security benefits. The number of
credits you need to get retirement benefits depends on
when you were born. If you were born in 1929 or later,
you need 40 credits (10 years of work).
 
How much will your retirement benefit be?
If you stop working before you have enough credits to
qualify for benefits, the credits will remain on your Social
Security record. If you return to work later, you can add
more credits to qualify. We can’t pay any retirement
benefits until you have the required number of credits.
 
We base your benefit payment on how much you earned
during your working career. Higher lifetime earnings result
in higher benefits. If there were some years you didn’t
work or had low earnings, your benefit amount may be
lower than if you had worked steadily.
 

 

Most likely there would have to be a formula change because the formula was what was wrong with it before the change.

.

Most likely a formula would have to invented JUST for them because the regular formula does not work and many of the standard rules would have to go by the wayside.

  • they have not worked long enough under and within the SS program to be vested in it since they did not pay these payroll taxes when at their government job where they are getting their pension.
  • new bend points to figure their AIM, to comput their benefit) would have to be determined based on their wages ONLY at their SS covered job

Somehow, for any change to be equitable, SSA has to figure these type claims differently, perhaps on a manuel basis and I am not too sure they aren't coming out ahead the way things currently are figured - so even a new formula might not give these folks what they think they deserve because it will depend on how long they worked under the SS system, what their wage range was during that time.

 

They didn't pay into the SS system at their government job - so none of that salary or time will be included.

 

Then would this be fair to others who didn't work long enough under the SS system to be vested?

 

Yes, it is very complicated. 

* * * * It's Always Something . . . Roseanne Roseannadanna
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Re: Repealing the Social Security Windfall Elimination Provision And Pension Offset 2017 Legislation

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Message 99 of 110
I was working for the Federal Government in 1983. All they told us was they were eliminating the the Civil Service Retirement System and changing to one where you paid into Social Security. They pushed the new plan but never told us how it would affect our Social Security benefits. I voted for the other guy.
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Message 100 of 110

If you put money in 2 seperate banks are you denied the use of funds from one? No. But this is what the WEP does to a number of workers who paid into both Social Security and a pension. What I would get without the WEP is pittance but with it poverty. I hope the RTTA and Mass Retired Teachers and the NEA can get congress to do something and either repeal or change the formula. 

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