The Windfall Elimination Provision (WEP) – back in the spot light
Social Security’s Windfall Elimination Provision (WEP) was enacted in 1983 as part of broader legislation to restore program solvency. WEP reduces Social Security benefits for anyone who also has a pension from an employer who did not participate in the Social Security program, choosing instead to offer more lucrative pensions to employees by not contributing Social Security FICA payroll taxes to the Federal Government. There are about 14 U.S. states which have, to varying degrees, chosen this route for their employees, such as teachers, law-enforcement and other public sector workers. But for many state retirees who have also worked for other employers who participated in Social Security, thus entitling them also to Social Security benefits, the WEP reduction is widely reviled. Although Congress has, for several years now, floated unsuccessful legislation which proposes to eliminate WEP, that concept is once again in the spotlight, as described in this CNBC Personal Finance article by contributor Lorie Konish. Click here to read more.