Content starts here
CLOSE ×

Search

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

Reply
Honored Social Butterfly

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

Update to those who are involved in these Social Security situations-

 

Here is the newest  legislation to be introduced to repeal the Social Security Windfall Elimination Provision and the Pension Offset.

 

H.R. 1205 - Social Security Fairness Act of 2017

 

introduced 02/2017 by Rep. Rodney Davis (R - IL)

currently 158 co-sponsors 

has gone through the Ways and Means Committee

now in the sub-committee for Social Security

 

identical bill in the Senate S.915

introducedm04/2017 by Senator Sherrod Brown (D - OH)

currently 9 co-sponsors

In the Finance Commttee

S. 915 Social Security Fairness Act of 2017

 

Here is what the Committee for the Preservation of Social Security and Medicare says about this proposed legislation.

NCPSSM Public Policy - Government Pension Offset and Windfall Elimination Provision

 

Only position I could find from AARP, although the article does not bear a year , John Rother left this position in 2011 - current AARP position ???????

 

AARP has not taken a position on GPO or WEP and neither supports nor opposes either piece of legislation. AARP’s public policies are recommended by its all volunteer National Legislative Council and approved by its volunteer Board of Directors. The Board has considered the issues but chose not to adopt policy on either the government pension offset (GPO) or the windfall elimination provision (WEP). Many teachers and public employees have been told they are being singled out for unfair treatment, but the issue is complex and if there were an injustice, AARP would be there fighting to correct it.

 

Washington Post ViewPoint : John Rother, AARP's Director of Policy and Strategy, on Social Security

 

 

 

 

 

 

 

It's Always Something . . . . Roseanna Roseannadanna
0 Kudos
44,289 Views
111
Report
Contributor

From 1996 - 2002, I worked at a state university, which had me pay into the state pension plan. When I left employment, I cashed out the pension plan and gave up all rights to a state pension. Yesterday, I was informed, by Socil Social Security, I was subject to WEP for those six years, reducing my monthly benefit by about $35/month. Fortunately I had 29 of 30 years minimum income. And, in the 30th year (my first year of employemnt), I was short $1400 to meet the minimum. Thus, I must accept a life long penalty of reduced beenfits, on money I no longer have. I was unemployed, during the 9/11 recession, hence why the pension was cahed in.

 

In 2005, Congress changed the law, that now requires the state pension authorities to inform people if they cash out the pension, and expect to only receve Social Security. This was not the case in 2002.

 

This is a ticking time bomb for people who worked in both the private and public sector, thinking that if the no longer have a state pension, they will not be subjected to WEP. It turns out they are.

 

While $35/month is not going to break me financially, it is just a penalty. A penalty similar to having to pay income taxes on 50% of Social Security benefits received in a given year. And, if you think Republicans are responsible, think again, A Democrat Congress passed this, and Reagan sign d it into law. This was doen at teh same time to riase FICA and to gradually raise the full retirement age, from 65 to 67, for those born after 1954. Thus, reducing benefits even more; in my case, anotehr $100 a month or so.

 

Considering the current political climate, it is doubtful WEP will be repealed, and that they will implement Social Security cuts, raise the retirement age, and used chained CPI to determin COLA, sending millions into poverty. Neither party's politician care, as they are multi-millionaires and have their own golden pensiosn and health care fro life.

0 Kudos
8,400 Views
0
Report
Regular Contributor

U.S. Representative Kevin Brady (R-TX) who chairs the U.S. House Ways and Means Committee, along with Ranking Member Richard Neal (D-MA), has introduced H.R. 6933 to amend Title II of the Social Security Act. The bill would replace the windfall elimination provision (WEP) with a formula equalizing benefits for certain individuals with non-covered employment.

For me the problem with his bill is it does not really help those who paid into SS for years before WEP became law. It only affects those who  are first eligible to retire in 2024 or later. Anyone else would get either a $50 or $100 monthly rebate. They claim it would be too expensive to reclculate everyones Social Security. Back paying everone affect by WEP would bankrupt SS but recalculating

the benefits should not be that costly. They do make software programs that could do it.

8,970 Views
0
Report
Contributor

BTW...

To answer the other question, I don’t recall if I signed a statement knowing that I was not going to put into Social Security in that first county that I worked in Georgia.  I’m sure they CYA and It was probably embedded somewhere in there.   Those nine years in that county contaminate all the other years that I paid in.  

0 Kudos
12,839 Views
0
Report
Contributor

 I am a little over 50 years old. I worked various jobs in my teens and 20s and early 30s that paid into Social Security. Then I took time off to stay home with my children.   I became a teacher and started working and Georgia were only a few counties pay Social Security to teachers. Unfortunately, I wasn’t aware of what it meant to take a job in a county that did not pay into it. I put nine years into a county that did not pay into Social Security. Luckily, I was told by someone that I should change counties and I did. The problem is those nine years show up as zeros in my Social Security record. I now have to make up those nine years and try to reach 30 years of countable income to offset the WEP.  As far as the GPO, there is a clause that says if you retire with the last 60 months or five years being in a job that pays Social Security...the GPO does not apply anymore.  

0 Kudos
12,820 Views
0
Report
Regular Contributor

This is like being punished for working hard and supporting your family. 

0 Kudos
8,916 Views
0
Report
Contributor

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.

0 Kudos
8,794 Views
24
Report
Honored Social Butterfly

@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 . . . . Roseanna Roseannadanna
0 Kudos
8,826 Views
23
Report
Regular Contributor


@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. 

0 Kudos
9,058 Views
22
Report
Periodic Contributor

Thousands of workers were not aware of the 30 year as provision. I think that was intentional. So much of this was swept under the rug by employers and the government. Employees should have had mandatory disclosure of ALL provisions of WEP GPO and a signed document expressing their understanding. WEP is very troubling but to me, more so GPO. I had no idea I did not get survivorship until after I retired. 

0 Kudos
11,834 Views
4
Report
Honored Social Butterfly


@AcC117647 wrote:

Thousands of workers were not aware of the 30 year as provision. I think that was intentional. So much of this was swept under the rug by employers and the government. Employees should have had mandatory disclosure of ALL provisions of WEP GPO and a signed document expressing their understanding. WEP is very troubling but to me, more so GPO. I had no idea I did not get survivorship until after I retired. 


Just a question to you and @l508156s since both of you have mentioned some public employees not being informed about this -

 

Was it not made clear in their paychecks and in the required (LEGAL) disclosures that they were NOT paying into the Social Security System while they were working at the public job?  And the effects of the WEP and GPO -  It was suppose to have been very clear - via disclosures - legal disclosures.  In fact, the notice to these employees were even covered by LAW.

 

SSA: State and Local Government Employers - Information

 

Attention! If you hire new employees not covered by Social Security: Section 419(c) of Public Law 108-203, the Social Security Protection Act of 2004, requires State and local government employers to disclose the effect of the Windfall Elimination Provision and the Government Pension Offset to employees hired on or after January 1, 2005, in jobs not covered by Social Security. The law requires newly hired public employees to sign a statement that they are aware of a possible reduction in their future Social Security benefit entitlement. For more detailed information about this law, and to view a copy of the statement concerning employment in a job not covered by Social Security (Form SSA-1945)

also see If You Hire New Employees Not Covered by Social Security.

 

SSA Section 218 Training: How State Administrators Should Share Important Information with Employers

 

This course serves as a reminder that Public Law 108-203 requires State and local government employers to disclose the effect of the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) to employees hired after January 1, 2005.  WEP and GPO are also explained.

 

As you can read in this course - it is a law that these employees be informed. 

 

 

 

It's Always Something . . . . Roseanna Roseannadanna
0 Kudos
12,504 Views
2
Report
Regular Contributor


@GailL1 wrote:

@AcC117647 wrote:

Thousands of workers were not aware of the 30 year as provision. I think that was intentional. So much of this was swept under the rug by employers and the government. Employees should have had mandatory disclosure of ALL provisions of WEP GPO and a signed document expressing their understanding. WEP is very troubling but to me, more so GPO. I had no idea I did not get survivorship until after I retired. 


Just a question to you and @l508156s since both of you have mentioned some public employees not being informed about this -

 

Was it not made clear in their paychecks and in the required (LEGAL) disclosures that they were NOT paying into the Social Security System while they were working at the public job?  And the effects of the WEP and GPO -  It was suppose to have been very clear - via disclosures - legal disclosures.  In fact, the notice to these employees were even covered by LAW.

 

SSA: State and Local Government Employers - Information

 

Attention! If you hire new employees not covered by Social Security: Section 419(c) of Public Law 108-203, the Social Security Protection Act of 2004, requires State and local government employers to disclose the effect of the Windfall Elimination Provision and the Government Pension Offset to employees hired on or after January 1, 2005, in jobs not covered by Social Security. The law requires newly hired public employees to sign a statement that they are aware of a possible reduction in their future Social Security benefit entitlement. For more detailed information about this law, and to view a copy of the statement concerning employment in a job not covered by Social Security (Form SSA-1945)

also see If You Hire New Employees Not Covered by Social Security.

 

SSA Section 218 Training: How State Administrators Should Share Important Information with Employers

 

This course serves as a reminder that Public Law 108-203 requires State and local government employers to disclose the effect of the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) to employees hired after January 1, 2005.  WEP and GPO are also explained.

 

As you can read in this course - it is a law that these employees be informed. 

 

 

 Federal employees have been paying in to Social Security since 1984. I started work with government in 1983. I worked 11 years before this where I paid into Social Security and 4 years after.

WEP became affective in 1984 so telling making a law saying you must legally document you told the employee social security was not being withheld 21 years later is like closing the door after the cow escapes. Of course I knew they were not withholding SS but at the time I went to work and my thinking is most of the others are thought the same way is we would get our Social Security as long as we had the required number of quarters. No one is asking to get Social Security if they did not contribute. 

They did an all out push trying to get employees to convert over to FERS from CSRS. Told us how much better our retirement would be. They never said a thing about them docking your Social Security 60%.

 

 

12,777 Views
1
Report
Contributor

I agree.  My husband started his police officer job in the 70's.  The pay was not enough to pay into county pension and opt to pay SS.  Of course the wep law was not in effect.  He has paid into SS well over 90 quarters and still they said he can not draw full amount he is entitled to.  He was retired from police dept in 1989 due to line of duty injury at age 39.  We were not aware of the WEP law untill years later when a friend who worked for post office told us about it.  But my husband has worked part time since his retirement and is still working at age 68 to make ends meet.  He decided to draw his SS a year ago because they said he will not make anymore then what he is drawing now

0 Kudos
10,283 Views
0
Report
Regular Contributor


@AcC117647 wrote:

Thousands of workers were not aware of the 30 year as provision. I think that was intentional. So much of this was swept under the rug by employers and the government. Employees should have had mandatory disclosure of ALL provisions of WEP GPO and a signed document expressing their understanding. WEP is very troubling but to me, more so GPO. I had no idea I did not get survivorship until after I retired. 


The Gopvernment does a first rate job of not informing employees of things that affect their tretirement. I was a temporary employee for 15 months and paid  SS unstead of into Civil Service.

Instead of telling me right after I went full time they waited until I retired to let me know if I paid them back $4,000 I could get $20 more a month. It would have a few hundred dollars if they told me in 1983.

0 Kudos
12,352 Views
0
Report
Honored Social Butterfly


@l508156s wrote:


 

 


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. 


The Social Security formula for the Old Age benefit is based on the year of first eligibility (the year a person attains age 62 in retirement cases).  But then that figure is adjusted up or down depending upon when a person begins to draw the benefit.  It would go down, if say, a widow begins to draw a widows benefit at 60 instead of older or adjusted upward if a person waits until full retirement age to retire or even upwards more if they wait until 70 to draw their benefit. 

 

SSA: Benefit Calculation Examples for Workers Retiring in 2018

 

The formula used is affected by several different factors to come up with the AIME -

  • How long you work *
  • How much you make each year *

* To be eligible for benefits, a minimum amount of taxable earnings must be recorded for at least 40 quarters (10 years).

 

  • Inflation
  • What age you begin taking your benefits

This is the part where the calculations go off for those are affected by the WEP:

The Average Indexed Monthly Earnings (AIME) is the average of the top 420 months (35 years) of earnings, up to maximum taxable amounts, with past earnings through age 60 indexed to higher amounts to account for economy-wide average wage growth. For someone whose career was shorter, this can include months with $0 earnings. For someone who has already logged 35 years of earnings and continues working, payroll taxes continue, but new wages must be higher than wages from the top 420 months in order to have an impact on benefits.

 

Then when the Primary Insurance Amount (PIA)  is calculated to determine the amount of available benefits at the full retirement age (FRA), this calculation translates the AIME using a progressive benefit formula which provides a higher percentage of the AIME to lower waged workers and less for higher waged workers. The PIA formula provides a 90% replacement rate for the lowest range of the AIME, a 32% replacement rate for the middle range, and a 15% replacement rate for the upper range. The average benefit is about 40% of average wages in a given year.

 

Like I said, for those with several years (more than 10) of work under the SS system at a substantial earnings amount (based on year - see the chart) and then have the rest of their employment under a public system NOT under SS - the calculations cannot be made as normal because of this progressivity of the formula.  It could be done in some other way, most likely manually. 

 

And I do not know what this formula would be - I am not an actuary.

The amount of payroll withholding paid into the system by the worker and the employer or all by a a self-employed person has nothing to do with benefit calcualtion except that it is a % of the earnings the worker made for that year.

 

Other companies where an employee earns both a SS retirement benefit AND a company pension - were covered under both systems at the same time - the SS system and their pension system and both the worker and the employer paid into the systems as stipulated during their working years.  If many public employees want this - they have to do the same - be covered by BOTH systems - the employer, in this case a public entity has to cover their share of the SS payroll tax AND whatever contractual agreement is in their pension plan on matched monies.

 

An employee of a public entity that does NOT pay into the SS system does not get any vestment into the SS system - they paid into their pension program.

Let's look at it from a different perspective -

Suppose a worker works long enough in a job covered by SS to be fully vested in it and then goes to work for a public entity that is NOT covered by the SS system.  Many public systems in this regards would require the employee to work so long and have so much vested in their system to be able to draw a pension.  If for whatever the reason those requirements weren't met, they get no pension - if they have personally invested in it, they may get that money back but no matched amount from the public entity

 

So think of the WEP as a way of getting money back but no, or minimal, match by the SS system . 

It all has to do with the amount of time working under the system and the substantial income earned during that period. 

 

Is the current formula right or wrong - I don't know but the previous way of figuring it was definitely wrong; that is why it was fixed.. 

 

Here ya go - two perspectives from separate sides of the isle to show you how complex the issue is and the problem even with some of these proposed legislations:

 

Congressional Testimony - Rep of Mercatus Center 03/22/2016 - Restoring Equity and Fairness to the S...

 

NEA 03/23/2016 - Congress rethinking GPO-WEP, controversial laws that penalize retired educators

 

 

It's Always Something . . . . Roseanna Roseannadanna
0 Kudos
8,899 Views
16
Report
Regular Contributor

Are you opposed to the WEP/GPO being repealed? It sure sounds like it. 

0 Kudos
8,846 Views
15
Report
Newbie

I am not only a victim of the SS Windfall Provision, I am the victim of dubious, immoral and unethical practices of the SS administration. I wasadvised on three separate occassions with the same representative of what my SS pension would be. This representative was advised on each occasion that I would be a OPERS recipient and on one occasion was given documentatiion of my pending OPERS retirement. I was advised on each occasion that I had  enough quarters in SS and would not be subject to the Windfall provision. Twenty months after recieving SS of approximately $900.00, I was notofied that my reitement would be reduced to $550..00 due to the Windfall proviison. Had I known at the time of this, I would have kept my $65K law enforcement job for another five years to make up the difference. This is outright theft by deception and theft from the elderly. In talking with a two supervisors at SS, I see they are operating under some very misguided ideas about OPERS. I did not engage with OPERS as a matter of choice. It was forced upon me as a requirement of employment. If anyone enjoys a windfall in this situation it is not me, but rather OPERS. If I had been able to put the $12.5K into a private investment account, it would be worth over three million dollars, at  which point I would not be having this disagreement with SS. I am being financially punished for the rules and actions of a state retirement system over which I have no control. At bottom this is an egregiuos violation of my !st, 8th, and 14th amendment rights. 

0 Kudos
11,170 Views
13
Report
Contributor

Total elimination with back pay would be the only fix.  I do agree with the Social Security assessment. I was not asked if I received a government pension and was told my SS pension would be a lot more then I expected ( i was aware of the WEP). I had to tell the representative and she had to go ask someone else.  

0 Kudos
9,284 Views
12
Report
Honored Social Butterfly


@jfgcantuaarp wrote:

Total elimination with back pay would be the only fix.  I do agree with the Social Security assessment. I was not asked if I received a government pension and was told my SS pension would be a lot more then I expected ( i was aware of the WEP). I had to tell the representative and she had to go ask someone else.  


This should not even be an issue anymore - at least not for State and Local Government Employees.  Shouldn't be any different for civilian federal employees either.  The whole thing comes down to whether or not your wages while working were within the Social Security system and thus had SS payroll taxes withheld and matched by the employer.  IF NOT, your wages under that condition should not be included in the SS benefit computation.

 

https://www.ssa.gov/planners/retire/stateandlocal.html

 

State And Local Government Employment

Work for a state or local government agency, including a school system, college or university, may or may not be covered by Social Security.

 

If you are covered by both your state or local pension plan and Social Security, you pay Social Security and Medicare taxes just as you would for any other Social Security covered job. You will see your earnings on your record.

 

If you are covered only by your state or local pension plan,

You don't pay Social Security taxes and your earnings won't be on your Social Security record. (Your record will, however, show your Medicare wages if you pay into that program.)


Your pension from non covered state or local government employment may affect the amount of your

Social Security benefit and
Social Security benefit as a spouse.

 

We cannot go back to the old way because the computation was wrong and it was "double dipping" because of how the formula was written.

 

ALL employees should be within the Social Security system - the only reason some are not in this case is that governments don't want to have to match their employee SS payroll withholding and employees don't want to pay them either.

 

You don't get the benefit if you don't play by the rules.

It's Always Something . . . . Roseanna Roseannadanna
0 Kudos
9,046 Views
11
Report
Regular Contributor

The issue is not so much that SS was not withheld from federal/state/etc. pay, but more so that post-retirement work benefits are unfairly targeted.  I am a federal retiree with 30 year civil service under CSRS.  Since retirement I have been the sole-proprietor of a women-owned small business where I pay both the employee SS contribution AND the employer SS contribution.  The SS Administration provides a table with the "substantial earnings" needed for each year to qualify that year towards the 30 year of substantial earnings.  Interestingly, my 14 years of "substantial earnings"  far exceeds the total of the 30 years in the chart. But that doesn't matter, only that I haven't worked an additional 30 years.

My SS benefit, earned entirely through my business and separate from my federal retirement, is currently reduced by approximately 32% while I continue to make full SS contributions as the employee and the employer.  These benefits are in no way a "windfall", they are benefits earned by having a business and contributing in accordance with the law. 

In my opinion the WEP is an illegal seizure of earned assets.  Repeal seems to have bi-partisan support, yet the bill never makes it out of committee. 

0 Kudos
7,971 Views
9
Report
Honored Social Butterfly


@mommak101 wrote:

The issue is not so much that SS was not withheld from federal/state/etc. pay, but more so that post-retirement work benefits are unfairly targeted.  I am a federal retiree with 30 year civil service under CSRS. 

It is all about the money - where do you think the money that is used to pay benefits comes from?  Your government empoyer decided, probably with your sanction, to pay you a pension rather than to participate in the SS where they would have had to collect the payroll withholding from you and then match those funds. 

 

A government employer does not pay federal income tax - a private employer does have to pay federal income tax and those matched funds are NOT taxed for private employers - therefore the government employer had no inticement to join into the SS system.

 


Since retirement I have been the sole-proprietor of a women-owned small business where I pay both the employee SS contribution AND the employer SS contribution.  The SS Administration provides a table with the "substantial earnings" needed for each year to qualify that year towards the 30 year of substantial earnings.  Interestingly, my 14 years of "substantial earnings"  far exceeds the total of the 30 years in the chart. But that doesn't matter, only that I haven't worked an additional 30 years.

 

That's because a SS benefit is actually figured on the amount of your pay over your entire working career - whether an employee or self-employed.  As a self-employed person you should know that even as an employer - you, under your SS #, are only credited with 1/2 of your total  contribution which is calculated on form SE.  The same way that only an employees contribution are shown on their W-2 because it is the pay amount on which those contribution are based (they have to balance) that is used to figure the benefit when one retires.

 

My SS benefit, earned entirely through my business and separate from my federal retirement, is currently reduced by approximately 32% while I continue to make full SS contributions as the employee and the employer.  These benefits are in no way a "windfall", they are benefits earned by having a business and contributing in accordance with the law. 

In my opinion the WEP is an illegal seizure of earned assets.  Repeal seems to have bi-partisan support, yet the bill never makes it out of committee. 

 

Actually, the "Windfall" is what was eliminated in the "Windfall Elimination Provision" - because of the old, unfair way that the benefits were calculated prior to 1983 - the "double dipping", so to speak.

 

Perhaps the SSA could give all the affected WEP beneficiaries a one time offer of paying ALL of their back payroll taxes and the matched amount since their employer didn't pay it, + interest into the SS system so that you could get the full benefit.  Got that much laying around for this??

 

I have a friend who worked his government job for over 30 years - he made sure that he also had private employment or self-employment income during that time earning the substantial earnings each year, at least, if not more - a few years at the maximum.  When he retired from the government job, he worked several more years self-employed to make sure he was out from under the WEP.  He gets both his pension and his full SS benefit after many years of working and working and working.

 

So keep on working that self-employed job - maybe you will close that WEP % even more.


 

It's Always Something . . . . Roseanna Roseannadanna
0 Kudos
10,335 Views
0
Report
Periodic Contributor

Unfortunately, most of the people who write comments about the unfairness of WEP come to the same conclusion that you and I do which is that all the "good" intentions to rectify this horrible law NEVER get out of committee.  For some reason Bills introduced into Congress go through a similar route, they move on and ultimately are sent to the President for signature and ultimately become law.  It is my firm opinion that the sole reason why legislation aimed at WEP do not move out of committe is because people who serve on these sub-committees simply DON'T WANT them to move forward!  I see the only way those of us who are negatively impacted by this situation is to replace every incumbent we can through the legislative process.  Over time those people who claim to represent us will GET THE MESSAGE.     

0 Kudos
7,847 Views
7
Report
Honored Social Butterfly


@SteveT934531 wrote:

Unfortunately, most of the people who write comments about the unfairness of WEP come to the same conclusion that you and I do which is that all the "good" intentions to rectify this horrible law NEVER get out of committee.  For some reason Bills introduced into Congress go through a similar route, they move on and ultimately are sent to the President for signature and ultimately become law.  It is my firm opinion that the sole reason why legislation aimed at WEP do not move out of committe is because people who serve on these sub-committees simply DON'T WANT them to move forward!  I see the only way those of us who are negatively impacted by this situation is to replace every incumbent we can through the legislative process.  Over time those people who claim to represent us will GET THE MESSAGE.     


It doesn't have anything to do with incumbents - it has to do with money.

Maybe the SSA could give all the affected WEP beneficiaries a one time offer of paying ALL of their back payroll taxes and the matched amount, of course + interest into the SS system so that you could get the full benefit and your pension too.  Got that much laying around for this??

 

 

It's Always Something . . . . Roseanna Roseannadanna
0 Kudos
9,146 Views
2
Report
Regular Contributor

I really like your idea of them refunding what we paid in plus interest. Mine has been collecting interest for over 40 years. That would be a nice payout. 

0 Kudos
9,447 Views
1
Report
Honored Social Butterfly


@l508156s wrote:

I really like your idea of them refunding what we paid in plus interest. Mine has been collecting interest for over 40 years. That would be a nice payout. 


Woman Wink

My idea was actually the other way, paying in to get the whole benefit rather than getting a refund and cancelling the whole benefit forever.   But what the heck, it should work both ways depending on where one might be in the WEP % reduction web..

 

However, I am afraid that the employers match to what you paid in has already been spent since it is submitted by the employer with no employee identification  - Woman Sad -  your part should have been shown on your W-2.  Add it up, add the appropriate interest ( I can help you find the data, if you want) and ask for that refund and remove yourself from this WEP mess.

 

It's Always Something . . . . Roseanna Roseannadanna
0 Kudos
10,653 Views
0
Report
Regular Contributor

Agree with your conclusion.  Our "power" lies in our votes, so EVERYONE needs to exercise their right to VOTE this Tuesday!

0 Kudos
8,171 Views
3
Report
Contributor

By the way, remember when Congress passed the WEP, raised FICA taxes, and raised the full retirement age, it was done in 1983. This was done by the Democrats and signed into law by Reagan. Thsi was done to "save Social Security and eliminate double dipping with Social Security and a public pension". This was also the year when they made Social Security benefits partially taxable. Thus, you may pay taxes on the same money twice. Once when you earned it, and  again, when you receive Social Security; if your combined retirement income exceeds $25000/year).

 

Never, in any of this, did they opt to eliminate the maximum salary cap subject to FICA. Which, if they did, they did not have to take any of those measures then.

 

The WEP, as what happened to me, still hits people even though they cashed out their public pension years ago, and were not told about teh WEP (that became law in 2005). You are still peanalized, because you did not meet Social Security guidelines for substantial income fro 30 years. This is where it is unfair. I can see it used, for its intendended purpose, reduce Social Security for money recived froma public pension. But, reducing Social Security, when you do not have a pension is a different story altogether.

 

Congress does not want to eliminate WEP, because it is oen way to reduce so called "entitlement spending". They also "borrowed" for years  from the Social Secuirty Trust Fund, and added this to the national debt. This si teh "debt" the GOP talsk about to reduce "entitlement" spending; they do not want to pay  back the IOUs. And, both parties are guoilty of this. EManwhile, Congress gets a generous pension benefit, but they want to wreck Social Security.

 

So, will voting the GOP out, and put Democrats in, get rid of the WEP, and fix SOocial Security? Probably not. Because, if they do, they have to riase txaes to make up for the lost  revenue. Or, do what President Obama was willing to do, used chaines CPI instead of CPI for cost of living increaes. If that were in affect now, instead of getting a 2.8% increase, in 2019, you'd be lucky if you recived a 1% increase (eliminated with the Medicare premium increase).

 

AARP is lobbying againt chained CPI, fortunately, and getting rid of the WEP. The problem is, the millionaire politicians, with their golden pensions, don't care.

0 Kudos
8,206 Views
2
Report
Regular Contributor


@nm5358 wrote:

By the way, remember when Congress passed the WEP, raised FICA taxes, and raised the full retirement age, it was done in 1983. This was done by the Democrats and signed into law by Reagan. Thsi was done to "save Social Security and eliminate double dipping with Social Security and a public pension". This was also the year when they made Social Security benefits partially taxable. Thus, you may pay taxes on the same money twice. Once when you earned it, and  again, when you receive Social Security; if your combined retirement income exceeds $25000/year).

 

Never, in any of this, did they opt to eliminate the maximum salary cap subject to FICA. Which, if they did, they did not have to take any of those measures then.

 

The WEP, as what happened to me, still hits people even though they cashed out their public pension years ago, and were not told about teh WEP (that became law in 2005). You are still peanalized, because you did not meet Social Security guidelines for substantial income fro 30 years. This is where it is unfair. I can see it used, for its intendended purpose, reduce Social Security for money recived froma public pension. But, reducing Social Security, when you do not have a pension is a different story altogether.

 

Congress does not want to eliminate WEP, because it is oen way to reduce so called "entitlement spending". They also "borrowed" for years  from the Social Secuirty Trust Fund, and added this to the national debt. This si teh "debt" the GOP talsk about to reduce "entitlement" spending; they do not want to pay  back the IOUs. And, both parties are guoilty of this. EManwhile, Congress gets a generous pension benefit, but they want to wreck Social Security.

 

So, will voting the GOP out, and put Democrats in, get rid of the WEP, and fix SOocial Security? Probably not. Because, if they do, they have to riase txaes to make up for the lost  revenue. Or, do what President Obama was willing to do, used chaines CPI instead of CPI for cost of living increaes. If that were in affect now, instead of getting a 2.8% increase, in 2019, you'd be lucky if you recived a 1% increase (eliminated with the Medicare premium increase).

 

AARP is lobbying againt chained CPI, fortunately, and getting rid of the WEP. The problem is, the millionaire politicians, with their golden pensions, don't care.


The Democrats controlled the House but the Republicans controlled the Senate. It was a bipartisan decision. They were both responsible. Any one who was elected to Congress after 1983 pays Social Security as do all Federal employees hired after 1983. The only ones with a "Golden Pension" are ones who worked 42 years under the Civil Service Retirement System". That includes both Congressmen and employees. Your work that long you get 80% of your 3 highest years of sal;ary. 

10,246 Views
0
Report
Honored Social Butterfly


@nm5358 wrote:

 This was also the year when they made Social Security benefits partially taxable. Thus, you may pay taxes on the same money twice. Once when you earned it, and  again, when you receive Social Security; if your combined retirement income exceeds $25000/year).

You are forgetting that the employer portion of the payroll tax has never been taxed.  If taxes are paid based on a retirees combined income when they complete their taxes - the amount they pay for this tax goes back into the Social Security Trust fund.

 

Never, in any of this, did they opt to eliminate the maximum salary cap subject to FICA. Which, if they did, they did not have to take any of those measures then.

The reason why the cap is there in the 1st place is to correlate it to the MAXIMUM benefit a person can draw.  Remove it and the amount of the MAXIMUM benefit will go up in correlation.  OR are you one that believes that there should be no benefit given for more payroll taxes paid into the system.  If you believe the later, then it will change the SS system to more of a welfare program.

 

The WEP, as what happened to me, still hits people even though they cashed out their public pension years ago, and were not told about teh WEP (that became law in 2005). You are still peanalized, because you did not meet Social Security guidelines for substantial income fro 30 years. This is where it is unfair. I can see it used, for its intendended purpose, reduce Social Security for money recived froma public pension. But, reducing Social Security, when you do not have a pension is a different story altogether.

What happened to your pension - did you NOT get any benefit from it either monthly or all at once?  Yes, ( Social Security) substantial earnings over a long term will reduce the WEP % reduction.  The closer you are to that 30 years the less your SS benefit is reduced. 

 

Did you NOT know that you were not paying any Social Security payroll taxes in your government job for all the years there????

 

Congress does not want to eliminate WEP, because it is oen way to reduce so called "entitlement spending". They also "borrowed" for years  from the Social Secuirty Trust Fund, and added this to the national debt. This si teh "debt" the GOP talsk about to reduce "entitlement" spending; they do not want to pay  back the IOUs. And, both parties are guoilty of this. EManwhile, Congress gets a generous pension benefit, but they want to wreck Social Security.

 All the money ever paid into Social Security is accounted for - you can even look at the balance sheets by year if you want.  ALL the money from payroll taxes, all the money from taxes paid on the benefits by beneficiary, interest on those Special Treasuries which is where the money sits when it is not paid out in benefits in the current period.  Less ALL the benefits paid and the Administration cost of running the program.  Congress may get a pension but they also pay into the Social Security system - started at the same time as the WEP and Penion Offset - 1983.

 

Government employees if they want a Social Security benefit based on their work as a government employee with or without private sector work should demand that they be included - but like I said in my other thread on this subject - if you want your pension too then the state may not want to match your SS contributions and keep the pension contribution too.  Perhaps have a 401K - self-funded only and then have the government employer pay their due matched amounts into the SS system in addition to your own.

 

So, will voting the GOP out, and put Democrats in, get rid of the WEP, and fix SOocial Security? Probably not. Because, if they do, they have to riase txaes to make up for the lost  revenue. Or, do what President Obama was willing to do, used chaines CPI instead of CPI for cost of living increaes. If that were in affect now, instead of getting a 2.8% increase, in 2019, you'd be lucky if you recived a 1% increase (eliminated with the Medicare premium increase).

It doesn't matter which party is in charge - the financial problems of Social Security is based on a lot of different problems - too few workers paying into the system, more automation, the huge number of baby boomers hitting the system in a short period of time (somewhat planned for) who are living longer and longer (Not really planned for in the numbers)- It will have to be a bipartisan effort with compromise to fix it - as was done by President Ronald Reagan and Speaker of the House, Tip O'Neill back in 1983.

 

The chained CPI has grown more slowly than the traditional CPI by an average of about 0.25 percentage points over the past decade. If the chained CPI were implemented, Social Security benefits would be about $3 per month lower in 2014, and about $30 a month lower by 2023, according to Congressional Budget Office calculations. And by 2033, Social Security payments are projected to be 3 percent lower than they would be using the current measure of inflation.

 

https://money.usnews.com/money/retirement/articles/2013/04/29/how-the-chained-cpi-affects-social-sec...

 

Course, there are some that would prefer using an "elderly index" reflecting more in the medical cost which seniors have more that others.

 

AARP is lobbying againt chained CPI, fortunately, and getting rid of the WEP. The problem is, the millionaire politicians, with their golden pensions, don't care.


Last I looked it was a Republican that had introduced bills to recalculate the WEP - it will never be done away with - changed maybe.

 

Maybe the SSA could give all the affected WEP beneficiaries a one time offer of paying ALL of their back payroll taxes and the matched amount, of course + interest into the SS system so that you could get the full benefit.  Got that much laying around for this??

It's Always Something . . . . Roseanna Roseannadanna
0 Kudos
9,121 Views
0
Report
Regular Contributor


@GailL1 wrote:

@jfgcantuaarp wrote:

Total elimination with back pay would be the only fix.  I do agree with the Social Security assessment. I was not asked if I received a government pension and was told my SS pension would be a lot more then I expected ( i was aware of the WEP). I had to tell the representative and she had to go ask someone else.  


This should not even be an issue anymore - at least not for State and Local Government Employees.  Shouldn't be any different for civilian federal employees either.  The whole thing comes down to whether or not your wages while working were within the Social Security system and thus had SS payroll taxes withheld and matched by the employer.  IF NOT, your wages under that condition should not be included in the SS benefit computation.

 

https://www.ssa.gov/planners/retire/stateandlocal.html

 

State And Local Government Employment

Work for a state or local government agency, including a school system, college or university, may or may not be covered by Social Security.

 

If you are covered by both your state or local pension plan and Social Security, you pay Social Security and Medicare taxes just as you would for any other Social Security covered job. You will see your earnings on your record.

 

If you are covered only by your state or local pension plan,

You don't pay Social Security taxes and your earnings won't be on your Social Security record. (Your record will, however, show your Medicare wages if you pay into that program.)


Your pension from non covered state or local government employment may affect the amount of your

Social Security benefit and
Social Security benefit as a spouse.

 

We cannot go back to the old way because the computation was wrong and it was "double dipping" because of how the formula was written.

 

ALL employees should be within the Social Security system - the only reason some are not in this case is that governments don't want to have to match their employee SS payroll withholding and employees don't want to pay them either.

 

You don't get the benefit if you don't play by the rules.


It should not be an issue for anyone who started working when the law was in affect. It is a major issue for those of us who paid into Social Security for years before the bill was passed. Your opinion why some state governments do not want to pay into Social Security is illogocical since most of them already match your pension withholding. If I had worked a full time job for 20 years prior to 1984 and found out I was only getting 40% of my Social Security I would be livid. 

8,984 Views
0
Report
Honored Social Butterfly


@l508156s wrote:

Are you opposed to the WEP/GPO being repealed? It sure sounds like it. 


I have already said that a better, probably a manually computed, formula has to be done just for theses outliers.  Can't repeal it until there is something to replace it with - because in this situation, it does not fit into the regular course of progressive formula SS calculations. 

 

All SS vested criteria has to be met also for those years where they were under the SS sytem.

 

Seems there has to be some government actuary to come up with a special formula in theses situations - but now getting anything (at all) passed in Congress right now especially if it involves SS is another matter.

 

Most likely it will have to be done when the SS system goes through reform to preserve it for the long term - well, at least 75 years.  If not, come about 2034, it won't matter much anyway because unless it gets fixed before that time - the SS law allows for an automatic deduction of ALL current beneficiaries checks.

 

So Rome is burning while the fiddlers play . . . .

SSA - Social Security / Medicare 2018 Trustee Report Summary

 

Social Security’s total cost is projected to exceed its total income (including interest) in 2018 for the first time since 1982, and to remain higher throughout the projection period. Social Security’s cost will be financed with a combination of non-interest income, interest income, and net redemptions of trust fund asset reserves from the General Fund of the Treasury until 2034 when the OASDI reserves will be depleted. Thereafter, scheduled tax income is projected to be sufficient to pay about three-quarters of scheduled benefits through the end of the projection period in 2092. The ratio of reserves to one year’s projected cost (the combined trust fund ratio) peaked in 2008, generally declined through 2017, and is expected to decline steadily until the trust fund reserves are depleted in 2034.

 

. . . . .  Conclusion

Lawmakers have many policy options that would reduce or eliminate the long-term financing shortfalls in Social Security and Medicare. Lawmakers should address these financial challenges as soon as possible. Taking action sooner rather than later will permit consideration of a broader range of solutions and provide more time to phase in changes so that the public has adequate time to prepare.

 

These same words basically have been repeated verbatim from the Trustees for the last several years.  So few legislators of either party will probably be willing to put more stress on the program - so it seems they go by the philosophy of fix it all or fix none of it - thus we stay in a stalemate.

Not sure I will be around in 2034 - but if so, I probably won't care too Woman Winkmuch. 

It's Always Something . . . . Roseanna Roseannadanna
0 Kudos
12,111 Views
0
Report
cancel
Showing results for 
Show  only  | Search instead for 
Did you mean: 
Users
Need to Know

NEW: AARP Games Tournament Tuesdays! This week, achieve a top score in Atari Breakout® and you could win $100! Learn More.

AARP Games Tournament Tuesdays

More From AARP