Posted on Saturday, 21st December 2024 by

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The U.S. Senate passed H.R. 82, the Social Security Fairness Act, repealing the windfall elimination provision (WEP) and the government pension offset (GPO), voting 76-20 on the final passage. The House passed the bill by 327-75 on November 12. The bill is now on the President’s desk, awaiting his signature.

Major Initiative by NARFE

We should all thank the National Active and Retired Federal Employees Association (NARFE), The National Education Association (NEA), and other organizations for their aggressive advocacy for repealing WEP and GPO for many years. NARFE has worked tirelessly to achieve this goal.

This bill provides substantial financial relief not only to federal CSRS employees and retirees but also to teachers in 15 states, police, firefighters, postal workers, and some state, county, local, and special district workers who have historically been penalized by GPO/WEP.

WEP No More

You are eligible for Social Security benefits if you accrued 40 quarters (10 years) of employment where Social Security payments were withheld. The Windfall Elimination Provision (WEP) significantly reduced most Civil Service Retirement System (CSRS) employee’s and annuitant’s Social Security payout.

According to the Social Security Administration data, the WEP penalized nearly 2 million Social Security beneficiaries. These affected workers were about 3% of all Social Security beneficiaries.

GPO Gone

The Government Pension Offset (GPO) affected workers entitled to a pension based on work in a Federal, State, or local government that was not covered by Social Security, such as CSRS. It also affected employees who transferred to FERS but did not work for 5 years under FERS.

The GPO reduces the benefits of over 724,000 Social Security beneficiaries, about 1% of all beneficiaries. Of those penalized by the GPO, 71% lost their entire Social Security benefit. 83% of those affected by the GPO are women.

The GPO did not affect employees who were required by law to have Social Security coverage — such as employees who FERS automatically covered without electing it and people with CSRS Offset coverage.

The End Game

After the President signs the bill, Social Security and OPM will need time to implement these changes. Be patient but vigilant; some may be overlooked or bypassed.

Helpful Retirement Planning Tools

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, investment, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center.

Over time, various dynamic economic factors relied upon as a basis for this article may change. The information contained herein should not be considered investment advice and may not be suitable for your situation. This service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

Last 5 posts by Dennis Damp

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Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE | Comments (0)


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