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Public Employees, Social Security, and Government Pension Offset
Many public employees in the 15 states not covered by Social Security often get a rude awakening at retirement time due to two provisions called the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). Both provisions were intended to treat public-sector employees the same way they would be treated if they spent their career in the Social Security system. WEP affects only “worker” benefits, but GPO impacts spousal, ex-spousal and survivor benefits. Public employees subject to GPO rules will see their Social Security benefits reduced by 2/3 of the non-Social Security retirement benefit. For example, if one receives $3,000 as a government pension, 2/3 of that benefit – or $2,000 – will be deducted from any spousal, ex-spousal or survivor benefits to determine the Social Security benefit. Under this rule, lump sum payments of non-Social Security benefits are converted to a monthly annuity payment. While employees who have worked 30+ years in the Social Security system with “substantial” earnings in addition to their public-sector earnings are exempt from WEP, that is not so with GPO. Further, GPO reduction can completely eliminate a Social Security benefit you may receive as a spouse, ex-spouse or survivor. Read the full article on GPO by Tom Hager in Forbes here.
The AMAC Foundation offers a free-to-the-public advisory service to all folks ageing into–or already in–Social Security. This service provides guidance in understanding the complexities of Social Security and the myriad rules and regulations associated with the process for claiming benefits (including WEP and GPO provisions), with NSSA-Certified Social Security Advisors available via email or telephone to discuss options. Learn more about this service via the Foundation’s website.