October 16, 2024 • 25 mins
Editor's note: In December 2024, Congress repealed the two provisions within Social Security benefits that we discuss in this episode.
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Continuing our discussion of Social Security benefits, we focus on unique provisions that can apply to public employees. Some people assume all public employees participate in Social Security, but this isn't always the case. We explore why some government workers, such as police officers and firefighters, might not be part of Social Security due to their unique pension plans.
We discuss two critical provisions that can impact Social Security benefits: the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP). Our guest, Kirk, from the Social Security Administration explains how these rules apply to folks trying to claim benefits on their own or a spouse's record while receiving a government pension.
More about the GPO: https://www.ssa.gov/policy/docs/program-explainers/government-pension-offset.html
More about the WEP: https://www.ssa.gov/policy/docs/program-explainers/windfall-elimination-provision.html
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:05):
In December 2024, Congress repealedtwo provisions
within Social Security benefitsthat we discuss in this episode.
The windfall elimination provisionand the governmental pension offset.
Though these featuresno longer apply to public employees.
We've left this episode availablein case anyone is interested
in learning how they previously worked.
(00:29):
Welcome back to Find Your Future with DRS.
Today we are continuing our discussionof Social Security benefits with Kirk.
In this episode, we'll be focusingon some unique provisions
that can apply to governmental employeeswho have pension plans
but didn't participate in Social Securitywhile contributing to those plans.
So to help us understand these rules.
(00:51):
Welcome back. Kirk.
Thank you. Good to be here today.
So Kirk, Jenny's introI think is helpful on this topic
because I think a lot of us think thateverybody participates in Social Security.
So can you give usmaybe a short, brief explanation of why
some public employeesdon't participate in Social Security?
(01:11):
Certainly. And this kind of goes back.
We're going to take a little tripback in time here.
So, 1930s, when they're designingthe Social Security program,
a lot of government groups and agencies
were not real keenon jumping into the program.
A lot of, cities, state government said,
(01:32):
hey, we already have a retirement programfor our workers.
We're not really excitedabout joining this federal program.
And so to get the law passed,they basically said, great.
If you have a plan that you're happy with,you have,
government employeesthat you're taking care of.
You do not have to enterinto this program.
(01:52):
So it was originally designedas a way to say,
we're not going to force other governmentagencies, whether they're state agencies,
city agencies, municipalities,other groups.
We're not going to force youto pay into Social Security.
You keep on doing what you're doing.
And so it was a way
to get this through Congressand get the Social Security law passed.
(02:14):
And in reality,the number of government employees
that don't pay in to Social Securityhas been dwindling over the years.
More and more, state governments,city governments have said,
yeah, this Social Security thing.
It's kind of hung around.
It's a good thing.
Let's keep it.
And we're going to go aheadand have our employees pay into it.
(02:35):
We may keep up another pension programfor them,
but we're going to, startpaying into this Social Security thing.
So today, the vast majority of people,probably about,
96% of all workersdo pay into Social Security.
It was kind of odd, but, up until 1984,federal employees
(02:57):
did not pay into Social Security,which is kind of odd, because here's
a great government programand government employees
working for the federal governmentweren't paying into it.
So it wasn't until 1984that all federal employees
started paying into Social Security.
And we began to slowlyclose out the old civil service program
(03:18):
in favor of the federal employeeretirement program.
It's very helpful context.
We did a little bit of research,
and in Washington state, somewhere aroundhalf of all police officers
don't participate in Social Securitythrough their local governments.
And, the vast majority of firefightersdon't participate in Social Security.
But when you go to other states,it's really spread out,
(03:41):
like the teachers in Californiadon't participate in social Security.
And a lot of the public employeesin Colorado
don't participate in Social Security
because they havetheir governmental pension plans instead.
So we just want to provide that contextbefore we jump into this
additional discussion,
since it might not applyto most of our listeners,
but it does apply to a small group,and it is really important for those folks
(04:04):
to be aware that it applies for them.
So good idea to check if you don't know,check with your employer, see if you're
participating in Social Securityand your your state pension plan.
So one other piece of backgroundinformation that's going to be helpful
as we go into this discussion is aroundspousal Social Security benefits.
And so, Kirk, I'm just going to give youa kind of a semi hypothetical
(04:26):
scenario of me and my wifeboth participating in Social Security,
paying into Social Securitywhen we retire.
We're both going to be eligible to collectour own Social Security benefits.
But then when one of us dies,the surviving person
may have the opportunity to collecta survivor Social Security benefit.
(04:46):
So, Kirk,tell me if I got all of that right.
And please feel free to addin any additional detail
that's important for spousal benefits.
So just generally speaking about spousalbenefits,
I'll ask you to elaborate on this questiona little bit more.
Yeah. Are either you or your spouse.
Do did you work for a government agency
(05:08):
and not pay into Social Securitywhile you work there?
Or has all of your time periodbeen where you worked
at, different agencies,and you did pay in the Social Security?
That that's a good question.
In this scenario,we have both paid into Social Security
and participated in our governmentalpension plans, at the same time.
(05:29):
So we've always participatedin Social Security.
Very good, very good.
Because if you had, a situation wherepart of your pension or part of your time
you worked at a government agencyand you did not pay in Social Security,
then two unique lawswould come into effect, which I think
we'll be discussing a little bit later on.
(05:50):
One is called the windfall eliminationprovision,
and the other one is calledthe Government Pension Offset.
So in this situation for youand your spouse that's not involved.
So that's that's a good thing.
But we'll talk abouthow a little bit later on
about how those particular two lawscould affect you.
So you are correct.
(06:10):
Let's say both of you and your spouse
have worked and paid into Social Security,and I'm going to be generous.
I'm going to give you $3,000 a month,
and I'm going to give your spouse,
let's say, $2,800 per month.
Pretty good work record.
So, I'm a generous guy.
I'll give you that money.
(06:30):
So now then, in life,
neither one of you could fileon each other's records.
We do have a special programcalled Spousal Benefits
that guaranteesthat your Social Security payment
would at least equal 50%of what your spouse would receive.
But individually,since both your records, one is 3000, one,
2800, you wouldn't qualify for that.
(06:53):
So now then, one of you passes away.
So this is the normal survivor's situationthat we see.
Let's, I'm going to say thatyou pass away, so you pass away
and you are getting the $3,000 per month
and your spouse is still living,and they were getting $2,800 per month.
What can now happen is your spouse
(07:16):
will simply convert up to your $3,000.
As long as your is overtheir full retirement age, let's say
age 67, you've passed away.
They now basically go from their $2,800per month to 3000.
So the main thingI want to point out here,
and this is a myththat some people have heard
(07:37):
you do not get both payments.
So your your surviving spouseisn't going to continue to get their 2800
and your 3000.
They simply get to convert upto the $3,000 payment.
Now then same scenario.
Now your spouse passes away.
(07:57):
Your spouse was getting the 2800and they pass away.
There's really no benefitsfor you to convert to.
You're already getting 3000.
You're alreadyabove what they were receiving.
You simply continue to get your $3,000a month payment.
That makes sense. That's super helpful.Thank you.
So now that we've established a little bitmore about spousal benefits, Kirk,
(08:20):
you already alluded to this a little bitthat there are two provisions
that we want to make sure our listenersare aware of and how their Social Security
benefits and pension benefits can interactor impact each other.
So could you tell us a little bitabout the government pension
offset provision that may affectthose spousal benefits we talked about?
(08:41):
Okay, so two regulationsthat we're going to be looking at here.
And you really need to separate these two
because they affect youin two very different ways.
So the government pension offset,it only affects you
if you are trying to claimspousal benefits on a living spouse,
or if you're trying to claim benefits
(09:03):
on a deceased spouse's record
and you are receiving a pension
from a government agency you worked at
and did not pay into Social Security.
We call that a non coveredgovernment pension.
So let's say you are a police officer.
(09:24):
We'll use that as an example.
As you noted, a number of police officersthat don't pay in to Social Security.
That's true across the nation.
And as you indicated, most firefightersdon't pay into Social Security as well.
So, let's we'll make you a police officer.
You are collecting a, let's say
$3,000 a month government pension
(09:45):
that you earned while not payingSocial Security taxes on your money.
What happened is basically the moneythat normally would have gone into Social
Security was diverted into another pensionprogram, your police officer's pension.
So, you really didn't necessarilypay less.
It's just that rather than goingto Social Security and a government
(10:06):
pension, it all just went tothis government pension.
So now you're getting this $3,000a month in government
pension,and let's say your spouse passes away.
So you've never paid into Social Security.
Let's say your whole career
is with as a police officer,you're getting that $3,000 per month.
So you're not on your ownSocial Security record.
(10:29):
You didn't get enough time.
You didn't get ten years worth of work,which we had explored at earlier.
That's kind of a minimum.
You need ten yearswhere you did pay to Social Security.
Let's say you didn't have that.
So your spouse passes away.
And let's say your spouse,when they pass away, was getting $2,000
per month off of Social Securitybecause your spouse did work and pay
(10:52):
into Social Security during their career,you inquire with us.
You want to filefor the Social Security benefits.
You want to get the $2,000
a month that your spouse was receivingwhen they passed away.
Well, this is when the government pensionoffset kicks in.
The rule is very simple.
(11:12):
If you're collecting that non coveredgovernment pension what you are
you're getting that $3,000.
It will take two thirds 66% of whatever
your government pension is your policeofficer's pension.
It's going to take two thirds of thatand subtract that out of what you can get
as a survivor offof your deceased spouse's record.
(11:37):
So two thirds of $3,000, that's $2,000.
When your spouse died,they were getting $2,000 per month.
So now we subtract 2000
out of 2000 leaves.
It was zero.
So under the rulesof the government pension offset,
(11:57):
if you are trying to file on somebodyelse's record, not your own record,
but somebody else's record as a survivor,as as a spouse,
they're going to take two thirdsof whatever your government pension is,
the government pension that you earnedand did not pay Social Security taxes on.
They take two thirds of thatand subtract it out of the Social Security
(12:18):
survivor benefit that you could receive.
In this scenario, it would meanthat you would be reduced to zero,
and you would not get anything offof your deceased spouse's record.
If you're deceased spouse, though, let'ssay, had been getting $2,500 per month,
same thing would happen.
We would subtract 2000 out of the 2500,
(12:39):
and now you get $500 per monthas a survivor's benefit.
So that's basicallyhow the government pension offset works.
That makes perfect sense to me.
Kirk, you explain a complicated topicreally straightforwardly.
I appreciate that.
So that example say I'm a police officer,I would continue
to receive my left pension, but
(13:02):
then I would also get $500 in this.
In the second scenario you provided,I would get $500 survivor benefit
from Social Security, not the full $2,500my spouse was previously getting.
That is correct. That is correct.
That makes sense.
So that would be the
situation on how that would happen.
(13:22):
So and then that one is the governmentpension offset provision.
But then there's also another provisionwe wanted to talk about today
that could apply to Social Securitybenefits for people who receive
a governmental pension, calledthe windfall Elimination provision or WEP.
Yes. So this one in this regulation
(13:43):
is a little bit more difficult to explain.
Now, then, for your listeners,if you do want to visit our website,
there are two sitesand on our website dedicated to this.
If you go to our website
and you, go to the search functionright at the top of the page
and you type in Government Pension Offset
(14:04):
or GPO, as it's referred to,or you type in windfall
elimination provision or simply EAP.
You'll find this site pretty quickly,and there's some great handouts
that will explain this a little bit more.
There's some nice illustrations to showyou how the benefits will be modified.
That will help you immensely.
(14:25):
So if you're if you're in this situation,if you're a government employee
and you do not pay into Social Security,highly encourage you to do this research
before reaching retirement ageso you understand what the limitations
are going to be.
So the windfall elimination provision,
once again, don't get this confusedwith the government pension offset.
(14:46):
Two very, very different rules.
Government pension offset affected you
if you were trying to get benefits onsomebody else's record.
But now the windfall eliminationprovision is going to affect you.
If you try to drawyour own Social Security number.
So using this fictitious police officerthat we've developed
(15:08):
that was going to get $3,000 per monthas a as a pension,
let's say this police officer
also worked some part timewhy they were a police officer
or maybe after,after they left the police department,
they went to got to work for a privateagency or maybe another government agency
where they did pay into Social Security.
(15:31):
And so they've gotten enough work to qualify for their own Social Security payment.
And let's say it's not a lot of workthey did.
Let's say their own Social Security check
was going to be, let's say, $900 per month
if they wait until their full retirementage, 67, and let's say they do that.
(15:53):
So at age 67,they come in, they've been getting
their retirement pensionfrom the police department for many years.
Now they want to starttheir Social Security benefits,
and it would be normally
normally $900 per month
if this police officer looked at theirmy Social security account,
(16:15):
the computer doesn't understandthat they're going to get this non
covered government pension.
The computer doesn't understandat this point
that they're going to be affectedby the windfall elimination provision.
So the computer is going to come back andsay you're going to get $900 per month.
So if the police officer hadn't doneany research on this,
they would think that they're goingto get $900 per month.
(16:35):
But they don't know thatwe're about to tell them
that they're going to get affectedby the windfall elimination provision.
So we now they come into the office,they're going to file for benefits,
and we tell them about the windfallelimination provision.
They go, oh, kind of heard about that.
Didn't know how it's going to affect me.
Now we got to give him the detailsabout how it will lower
(16:57):
their Social Security payments.
So what this does is actually modify
the formulathat we use to calculate a person's
monthly social Security benefit,and that's all it's doing.
Basically, it is going to lower how muchthe individual is going to receive.
And for conversationpurposes, we're basically going to say
(17:20):
that it will lower an individual's benefitby about
$550 per month.
So that's the maximum
that you could normally expectto see about 550.
I say about 550, because this changes
a little bit each yearas the cost of living goes up,
that reduction goes up a little bitalso each year.
(17:44):
But for conversation purposes,we're going to say
the maximumthat this person could be affected
by would be a reduction of $550
to their $900 payment.
The computer is actually going to runthree basic tests
to see how this person'sgoing to be affected.
(18:05):
The first testis it goes, okay, I'm going to lower their
$900 payment by $550.
The second test it runs is it says,
I'm going to cut the individual'sbenefit in half.
So it says, okay, I'mgoing to reduce it by 550
or half of their benefit,their benefits $900.
(18:26):
Half of that is 450.
Good news.
The lowest, the most that's going to do tothis person is reduce
their Social Security paymentby about $450.
Third option it will do.
It will say, I'mgoing to lower this person
by 50% of whatevertheir government pension
(18:46):
is in this person's situation, whatevertheir police officer's pension is.
I'm going to lower their benefitby 50% of that.
This person's getting a $3,000a month pension.
Half of that is 1500.
Good news.
The computer's always going to optfor the least of the three options.
(19:07):
So the computer has three options.
Lower the Social Security check by 1500.
Lower the Social Securitycheck by the 550, or lower
the Social Security check by 450
and chooses to use the 450.
So now we tell this police officer,your $900 payment
has just been reduced to $450,and that's how much you could file for
(19:30):
because of the windfall eliminationprovision.
I appreciate thethere's a lot of complexity in there
that you summarized and gave us a great,clear, reasonable example.
So really appreciate,
Kirk, that you took the time toto give us both of those examples.
And you mentioned thatif people want to research more about this
(19:51):
on their own, going to the Social Securitywebsite, SSA, McGovern,
and then typing in either GPOfor governmental pension offset
or Weap for windfall eliminationprovision, are really helpful
ways to learn more aboutif these situations apply to you.
I have two takeaways that I want to run byand make sure I got this.
(20:14):
So first takeaway if you or your spousedidn't pay into Social Security
while earning a governmental pension,you should do some more research.
I think that's one of our big takeawaysfor this episode.
Absolutely.
The other takeaway you didn't talk about,but I think this is important
for DRS to saywe get these questions a lot.
(20:35):
These are really questionsabout your Social Security benefit.
People oftentimes think these reductionsmight negatively impact
their pension benefits.
We don't
care address whether or notyou participated in Social Security
or what your Social Security benefitsare when you choose to receive them.
Anything like that,it has no impact on your pension benefits.
(20:55):
It's really the impactit's having on your Social Security.
So you're going to need to work with them.
Sometimes they need information from usor from your former employer,
and we're certainly willingto provide that information.
But it's really your Social Securitybenefits that are going to possibly
have an impact, and you're going to wantto learn more about that.
Exactly.
And I will say that we talked about thistoday and very general terms.
(21:19):
Each person can almostin many different ways, be affected
uniquely by these particular laws,
depending on what their workhistory looks like, depending on
if they had a career, their entire career
was in a situation where they didn'tpay into Social Security.
Maybe only half their career was,
There's also a few exceptionsto these particular laws,
(21:41):
that exist that could end upmodifying the effect on you.
So these are complex laws.
I do encourage that of, with doctors.
I do a training classon these two particular laws,
the windfall elimination provisionand the government pension offset.
That's probably about an hourand 20 minute class
(22:01):
that where we really diga little bit deeper into these.
But I think we prettywell covered the heart of it
as much as you canwithout looking at your individual case.
The good news, I'd like peopleto take away with it,
because the windfall eliminationprovision can make a lot of people nervous
when they're looking at that.
Remember, the most that it would dois reduce your benefits by about 550.
(22:26):
Once again, a generality,but if you want some more specific numbers
visiting our website.
Once again,we do have a special calculator
where you can go ahead and typein some information from your work record,
and it will give you a much more detailedexplanation
of how your benefits, Social Securitypayments could be affected.
Yeah.And then once again, your website is.
(22:48):
Uh.ssa.gov.
Perfect. Perfect.
Thank you very muchKirk for taking time and sharing this.
And I appreciate alsothat you plugged the webinars and work
that you do with the IRS, you know,throughout the year to educate people
who are participating in Social Securityin the state of Washington.
So really appreciate all the workyou do to educate all of our employees.
(23:12):
No problem.
And I think the one that coversthe windfall elimination provision
and government pension offset,I believe that is in December.
So if you want knowledge ratherthan a Christmas gift, join that webinar.
This will give you a little bit
more informationabout how these laws will affect you.
And I do encourage you to try to go online
and try to get some additional informationabout that.
(23:33):
We've just kind of scratched the surfacehere.
If you're getting close to retirement,you probably want a little bit more
refined explanation of howthis would affect you,
especially if you're really tryingto track dollar for dollar.
All your incomes are going to be.
Yeah, I appreciate that.
We should also mentionwe talked a lot about police and fire.
We know there are some citylocal governments
(23:53):
that don't participate in Social Security.
So once again, check with your employer
if it's not something that you've everthought about to figure out if you are
or have in the pastparticipated in Social Security.
So exactly.
I actually believe it or not,I believe there's over 140 different
agencies in the state of Washington alonethat don't pay in the Social Security.
(24:15):
Now then, some of these are very small.
They only maybe have like three employees.
But there are a number of agenciesthat do not pay in to Social Security.
Yeah I appreciate that contact.
So once again yeah.Thanks for joining us Kirk.
And we certainly encourage people to goto their own Social Security account.
Sign up for my social Security accountat SSA gov.
(24:37):
And make sure you have better knowledge
about the way your future Social Securitybenefits are going to be paid to you.
Exactly. Thank you. Thank you.
Thanks for listeningand now we'd love to hear from you.
What topics would you like to hear about?
What questions do you have for us?
Send an email to Dot podcasts at Dr.
(24:57):
Squiggly that's Dress podcast at Desa Gov.
The Department of Retirement Systemsprovides this podcast as a public service,
but it's neither a legal interpretationnor statement of dress policy.
References to any specific productor entity do not constitute
an endorsement or recommendation.
The views expressed by guests are theirown, and their appearance on the program
(25:19):
does not imply an endorsement of themor any entity they represent.
Views and opinions expressed by dressedemployees are those of the employees,
and do not necessarily reflectthe view of dress or any of its officials.
In December 2024, Congress repealedtwo provisions
within Social Security benefitsthat we discuss in this episode.
The windfall elimination provisionand the governmental pension offset.
Though these featuresno longer apply to public employees.
We've left this episode availablein case anyone is interested
in learning how they previously worked.
(00:29):
Welcome back to Find Your Future with DRS.
Today we are continuing our discussionof Social Security benefits with Kirk.
In this episode, we'll be focusingon some unique provisions
that can apply to governmental employeeswho have pension plans
but didn't participate in Social Securitywhile contributing to those plans.
So to help us understand these rules.
(00:51):
Welcome back. Kirk.
Thank you. Good to be here today.
So Kirk, Jenny's introI think is helpful on this topic
because I think a lot of us think thateverybody participates in Social Security.
So can you give usmaybe a short, brief explanation of why
some public employeesdon't participate in Social Security?
(01:11):
Certainly. And this kind of goes back.
We're going to take a little tripback in time here.
So, 1930s, when they're designingthe Social Security program,
a lot of government groups and agencies
were not real keenon jumping into the program.
A lot of, cities, state government said,
(01:32):
hey, we already have a retirement programfor our workers.
We're not really excitedabout joining this federal program.
And so to get the law passed,they basically said, great.
If you have a plan that you're happy with,you have,
government employeesthat you're taking care of.
You do not have to enterinto this program.
(01:52):
So it was originally designedas a way to say,
we're not going to force other governmentagencies, whether they're state agencies,
city agencies, municipalities,other groups.
We're not going to force youto pay into Social Security.
You keep on doing what you're doing.
And so it was a way
to get this through Congressand get the Social Security law passed.
(02:14):
And in reality,the number of government employees
that don't pay in to Social Securityhas been dwindling over the years.
More and more, state governments,city governments have said,
yeah, this Social Security thing.
It's kind of hung around.
It's a good thing.
Let's keep it.
And we're going to go aheadand have our employees pay into it.
(02:35):
We may keep up another pension programfor them,
but we're going to, startpaying into this Social Security thing.
So today, the vast majority of people,probably about,
96% of all workersdo pay into Social Security.
It was kind of odd, but, up until 1984,federal employees
(02:57):
did not pay into Social Security,which is kind of odd, because here's
a great government programand government employees
working for the federal governmentweren't paying into it.
So it wasn't until 1984that all federal employees
started paying into Social Security.
And we began to slowlyclose out the old civil service program
(03:18):
in favor of the federal employeeretirement program.
It's very helpful context.
We did a little bit of research,
and in Washington state, somewhere aroundhalf of all police officers
don't participate in Social Securitythrough their local governments.
And, the vast majority of firefightersdon't participate in Social Security.
But when you go to other states,it's really spread out,
(03:41):
like the teachers in Californiadon't participate in social Security.
And a lot of the public employeesin Colorado
don't participate in Social Security
because they havetheir governmental pension plans instead.
So we just want to provide that contextbefore we jump into this
additional discussion,
since it might not applyto most of our listeners,
but it does apply to a small group,and it is really important for those folks
(04:04):
to be aware that it applies for them.
So good idea to check if you don't know,check with your employer, see if you're
participating in Social Securityand your your state pension plan.
So one other piece of backgroundinformation that's going to be helpful
as we go into this discussion is aroundspousal Social Security benefits.
And so, Kirk, I'm just going to give youa kind of a semi hypothetical
(04:26):
scenario of me and my wifeboth participating in Social Security,
paying into Social Securitywhen we retire.
We're both going to be eligible to collectour own Social Security benefits.
But then when one of us dies,the surviving person
may have the opportunity to collecta survivor Social Security benefit.
(04:46):
So, Kirk,tell me if I got all of that right.
And please feel free to addin any additional detail
that's important for spousal benefits.
So just generally speaking about spousalbenefits,
I'll ask you to elaborate on this questiona little bit more.
Yeah. Are either you or your spouse.
Do did you work for a government agency
(05:08):
and not pay into Social Securitywhile you work there?
Or has all of your time periodbeen where you worked
at, different agencies,and you did pay in the Social Security?
That that's a good question.
In this scenario,we have both paid into Social Security
and participated in our governmentalpension plans, at the same time.
(05:29):
So we've always participatedin Social Security.
Very good, very good.
Because if you had, a situation wherepart of your pension or part of your time
you worked at a government agencyand you did not pay in Social Security,
then two unique lawswould come into effect, which I think
we'll be discussing a little bit later on.
(05:50):
One is called the windfall eliminationprovision,
and the other one is calledthe Government Pension Offset.
So in this situation for youand your spouse that's not involved.
So that's that's a good thing.
But we'll talk abouthow a little bit later on
about how those particular two lawscould affect you.
So you are correct.
(06:10):
Let's say both of you and your spouse
have worked and paid into Social Security,and I'm going to be generous.
I'm going to give you $3,000 a month,
and I'm going to give your spouse,
let's say, $2,800 per month.
Pretty good work record.
So, I'm a generous guy.
I'll give you that money.
(06:30):
So now then, in life,
neither one of you could fileon each other's records.
We do have a special programcalled Spousal Benefits
that guaranteesthat your Social Security payment
would at least equal 50%of what your spouse would receive.
But individually,since both your records, one is 3000, one,
2800, you wouldn't qualify for that.
(06:53):
So now then, one of you passes away.
So this is the normal survivor's situationthat we see.
Let's, I'm going to say thatyou pass away, so you pass away
and you are getting the $3,000 per month
and your spouse is still living,and they were getting $2,800 per month.
What can now happen is your spouse
(07:16):
will simply convert up to your $3,000.
As long as your is overtheir full retirement age, let's say
age 67, you've passed away.
They now basically go from their $2,800per month to 3000.
So the main thingI want to point out here,
and this is a myththat some people have heard
(07:37):
you do not get both payments.
So your your surviving spouseisn't going to continue to get their 2800
and your 3000.
They simply get to convert upto the $3,000 payment.
Now then same scenario.
Now your spouse passes away.
(07:57):
Your spouse was getting the 2800and they pass away.
There's really no benefitsfor you to convert to.
You're already getting 3000.
You're alreadyabove what they were receiving.
You simply continue to get your $3,000a month payment.
That makes sense. That's super helpful.Thank you.
So now that we've established a little bitmore about spousal benefits, Kirk,
(08:20):
you already alluded to this a little bitthat there are two provisions
that we want to make sure our listenersare aware of and how their Social Security
benefits and pension benefits can interactor impact each other.
So could you tell us a little bitabout the government pension
offset provision that may affectthose spousal benefits we talked about?
(08:41):
Okay, so two regulationsthat we're going to be looking at here.
And you really need to separate these two
because they affect youin two very different ways.
So the government pension offset,it only affects you
if you are trying to claimspousal benefits on a living spouse,
or if you're trying to claim benefits
(09:03):
on a deceased spouse's record
and you are receiving a pension
from a government agency you worked at
and did not pay into Social Security.
We call that a non coveredgovernment pension.
So let's say you are a police officer.
(09:24):
We'll use that as an example.
As you noted, a number of police officersthat don't pay in to Social Security.
That's true across the nation.
And as you indicated, most firefightersdon't pay into Social Security as well.
So, let's we'll make you a police officer.
You are collecting a, let's say
$3,000 a month government pension
(09:45):
that you earned while not payingSocial Security taxes on your money.
What happened is basically the moneythat normally would have gone into Social
Security was diverted into another pensionprogram, your police officer's pension.
So, you really didn't necessarilypay less.
It's just that rather than goingto Social Security and a government
(10:06):
pension, it all just went tothis government pension.
So now you're getting this $3,000a month in government
pension,and let's say your spouse passes away.
So you've never paid into Social Security.
Let's say your whole career
is with as a police officer,you're getting that $3,000 per month.
So you're not on your ownSocial Security record.
(10:29):
You didn't get enough time.
You didn't get ten years worth of work,which we had explored at earlier.
That's kind of a minimum.
You need ten yearswhere you did pay to Social Security.
Let's say you didn't have that.
So your spouse passes away.
And let's say your spouse,when they pass away, was getting $2,000
per month off of Social Securitybecause your spouse did work and pay
(10:52):
into Social Security during their career,you inquire with us.
You want to filefor the Social Security benefits.
You want to get the $2,000
a month that your spouse was receivingwhen they passed away.
Well, this is when the government pensionoffset kicks in.
The rule is very simple.
(11:12):
If you're collecting that non coveredgovernment pension what you are
you're getting that $3,000.
It will take two thirds 66% of whatever
your government pension is your policeofficer's pension.
It's going to take two thirds of thatand subtract that out of what you can get
as a survivor offof your deceased spouse's record.
(11:37):
So two thirds of $3,000, that's $2,000.
When your spouse died,they were getting $2,000 per month.
So now we subtract 2000
out of 2000 leaves.
It was zero.
So under the rulesof the government pension offset,
(11:57):
if you are trying to file on somebodyelse's record, not your own record,
but somebody else's record as a survivor,as as a spouse,
they're going to take two thirdsof whatever your government pension is,
the government pension that you earnedand did not pay Social Security taxes on.
They take two thirds of thatand subtract it out of the Social Security
(12:18):
survivor benefit that you could receive.
In this scenario, it would meanthat you would be reduced to zero,
and you would not get anything offof your deceased spouse's record.
If you're deceased spouse, though, let'ssay, had been getting $2,500 per month,
same thing would happen.
We would subtract 2000 out of the 2500,
(12:39):
and now you get $500 per monthas a survivor's benefit.
So that's basicallyhow the government pension offset works.
That makes perfect sense to me.
Kirk, you explain a complicated topicreally straightforwardly.
I appreciate that.
So that example say I'm a police officer,I would continue
to receive my left pension, but
(13:02):
then I would also get $500 in this.
In the second scenario you provided,I would get $500 survivor benefit
from Social Security, not the full $2,500my spouse was previously getting.
That is correct. That is correct.
That makes sense.
So that would be the
situation on how that would happen.
(13:22):
So and then that one is the governmentpension offset provision.
But then there's also another provisionwe wanted to talk about today
that could apply to Social Securitybenefits for people who receive
a governmental pension, calledthe windfall Elimination provision or WEP.
Yes. So this one in this regulation
(13:43):
is a little bit more difficult to explain.
Now, then, for your listeners,if you do want to visit our website,
there are two sitesand on our website dedicated to this.
If you go to our website
and you, go to the search functionright at the top of the page
and you type in Government Pension Offset
(14:04):
or GPO, as it's referred to,or you type in windfall
elimination provision or simply EAP.
You'll find this site pretty quickly,and there's some great handouts
that will explain this a little bit more.
There's some nice illustrations to showyou how the benefits will be modified.
That will help you immensely.
(14:25):
So if you're if you're in this situation,if you're a government employee
and you do not pay into Social Security,highly encourage you to do this research
before reaching retirement ageso you understand what the limitations
are going to be.
So the windfall elimination provision,
once again, don't get this confusedwith the government pension offset.
(14:46):
Two very, very different rules.
Government pension offset affected you
if you were trying to get benefits onsomebody else's record.
But now the windfall eliminationprovision is going to affect you.
If you try to drawyour own Social Security number.
So using this fictitious police officerthat we've developed
(15:08):
that was going to get $3,000 per monthas a as a pension,
let's say this police officer
also worked some part timewhy they were a police officer
or maybe after,after they left the police department,
they went to got to work for a privateagency or maybe another government agency
where they did pay into Social Security.
(15:31):
And so they've gotten enough work to qualify for their own Social Security payment.
And let's say it's not a lot of workthey did.
Let's say their own Social Security check
was going to be, let's say, $900 per month
if they wait until their full retirementage, 67, and let's say they do that.
(15:53):
So at age 67,they come in, they've been getting
their retirement pensionfrom the police department for many years.
Now they want to starttheir Social Security benefits,
and it would be normally
normally $900 per month
if this police officer looked at theirmy Social security account,
(16:15):
the computer doesn't understandthat they're going to get this non
covered government pension.
The computer doesn't understandat this point
that they're going to be affectedby the windfall elimination provision.
So the computer is going to come back andsay you're going to get $900 per month.
So if the police officer hadn't doneany research on this,
they would think that they're goingto get $900 per month.
(16:35):
But they don't know thatwe're about to tell them
that they're going to get affectedby the windfall elimination provision.
So we now they come into the office,they're going to file for benefits,
and we tell them about the windfallelimination provision.
They go, oh, kind of heard about that.
Didn't know how it's going to affect me.
Now we got to give him the detailsabout how it will lower
(16:57):
their Social Security payments.
So what this does is actually modify
the formulathat we use to calculate a person's
monthly social Security benefit,and that's all it's doing.
Basically, it is going to lower how muchthe individual is going to receive.
And for conversationpurposes, we're basically going to say
(17:20):
that it will lower an individual's benefitby about
$550 per month.
So that's the maximum
that you could normally expectto see about 550.
I say about 550, because this changes
a little bit each yearas the cost of living goes up,
that reduction goes up a little bitalso each year.
(17:44):
But for conversation purposes,we're going to say
the maximumthat this person could be affected
by would be a reduction of $550
to their $900 payment.
The computer is actually going to runthree basic tests
to see how this person'sgoing to be affected.
(18:05):
The first testis it goes, okay, I'm going to lower their
$900 payment by $550.
The second test it runs is it says,
I'm going to cut the individual'sbenefit in half.
So it says, okay, I'mgoing to reduce it by 550
or half of their benefit,their benefits $900.
(18:26):
Half of that is 450.
Good news.
The lowest, the most that's going to do tothis person is reduce
their Social Security paymentby about $450.
Third option it will do.
It will say, I'mgoing to lower this person
by 50% of whatevertheir government pension
(18:46):
is in this person's situation, whatevertheir police officer's pension is.
I'm going to lower their benefitby 50% of that.
This person's getting a $3,000a month pension.
Half of that is 1500.
Good news.
The computer's always going to optfor the least of the three options.
(19:07):
So the computer has three options.
Lower the Social Security check by 1500.
Lower the Social Securitycheck by the 550, or lower
the Social Security check by 450
and chooses to use the 450.
So now we tell this police officer,your $900 payment
has just been reduced to $450,and that's how much you could file for
(19:30):
because of the windfall eliminationprovision.
I appreciate thethere's a lot of complexity in there
that you summarized and gave us a great,clear, reasonable example.
So really appreciate,
Kirk, that you took the time toto give us both of those examples.
And you mentioned thatif people want to research more about this
(19:51):
on their own, going to the Social Securitywebsite, SSA, McGovern,
and then typing in either GPOfor governmental pension offset
or Weap for windfall eliminationprovision, are really helpful
ways to learn more aboutif these situations apply to you.
I have two takeaways that I want to run byand make sure I got this.
(20:14):
So first takeaway if you or your spousedidn't pay into Social Security
while earning a governmental pension,you should do some more research.
I think that's one of our big takeawaysfor this episode.
Absolutely.
The other takeaway you didn't talk about,but I think this is important
for DRS to saywe get these questions a lot.
(20:35):
These are really questionsabout your Social Security benefit.
People oftentimes think these reductionsmight negatively impact
their pension benefits.
We don't
care address whether or notyou participated in Social Security
or what your Social Security benefitsare when you choose to receive them.
Anything like that,it has no impact on your pension benefits.
(20:55):
It's really the impactit's having on your Social Security.
So you're going to need to work with them.
Sometimes they need information from usor from your former employer,
and we're certainly willingto provide that information.
But it's really your Social Securitybenefits that are going to possibly
have an impact, and you're going to wantto learn more about that.
Exactly.
And I will say that we talked about thistoday and very general terms.
(21:19):
Each person can almostin many different ways, be affected
uniquely by these particular laws,
depending on what their workhistory looks like, depending on
if they had a career, their entire career
was in a situation where they didn'tpay into Social Security.
Maybe only half their career was,
There's also a few exceptionsto these particular laws,
(21:41):
that exist that could end upmodifying the effect on you.
So these are complex laws.
I do encourage that of, with doctors.
I do a training classon these two particular laws,
the windfall elimination provisionand the government pension offset.
That's probably about an hourand 20 minute class
(22:01):
that where we really diga little bit deeper into these.
But I think we prettywell covered the heart of it
as much as you canwithout looking at your individual case.
The good news, I'd like peopleto take away with it,
because the windfall eliminationprovision can make a lot of people nervous
when they're looking at that.
Remember, the most that it would dois reduce your benefits by about 550.
(22:26):
Once again, a generality,but if you want some more specific numbers
visiting our website.
Once again,we do have a special calculator
where you can go ahead and typein some information from your work record,
and it will give you a much more detailedexplanation
of how your benefits, Social Securitypayments could be affected.
Yeah.And then once again, your website is.
(22:48):
Uh.ssa.gov.
Perfect. Perfect.
Thank you very muchKirk for taking time and sharing this.
And I appreciate alsothat you plugged the webinars and work
that you do with the IRS, you know,throughout the year to educate people
who are participating in Social Securityin the state of Washington.
So really appreciate all the workyou do to educate all of our employees.
(23:12):
No problem.
And I think the one that coversthe windfall elimination provision
and government pension offset,I believe that is in December.
So if you want knowledge ratherthan a Christmas gift, join that webinar.
This will give you a little bit
more informationabout how these laws will affect you.
And I do encourage you to try to go online
and try to get some additional informationabout that.
(23:33):
We've just kind of scratched the surfacehere.
If you're getting close to retirement,you probably want a little bit more
refined explanation of howthis would affect you,
especially if you're really tryingto track dollar for dollar.
All your incomes are going to be.
Yeah, I appreciate that.
We should also mentionwe talked a lot about police and fire.
We know there are some citylocal governments
(23:53):
that don't participate in Social Security.
So once again, check with your employer
if it's not something that you've everthought about to figure out if you are
or have in the pastparticipated in Social Security.
So exactly.
I actually believe it or not,I believe there's over 140 different
agencies in the state of Washington alonethat don't pay in the Social Security.
(24:15):
Now then, some of these are very small.
They only maybe have like three employees.
But there are a number of agenciesthat do not pay in to Social Security.
Yeah I appreciate that contact.
So once again yeah.Thanks for joining us Kirk.
And we certainly encourage people to goto their own Social Security account.
Sign up for my social Security accountat SSA gov.
(24:37):
And make sure you have better knowledge
about the way your future Social Securitybenefits are going to be paid to you.
Exactly. Thank you. Thank you.
Thanks for listeningand now we'd love to hear from you.
What topics would you like to hear about?
What questions do you have for us?
Send an email to Dot podcasts at Dr.
(24:57):
Squiggly that's Dress podcast at Desa Gov.
The Department of Retirement Systemsprovides this podcast as a public service,
but it's neither a legal interpretationnor statement of dress policy.
References to any specific productor entity do not constitute
an endorsement or recommendation.
The views expressed by guests are theirown, and their appearance on the program
(25:19):
does not imply an endorsement of themor any entity they represent.
Views and opinions expressed by dressedemployees are those of the employees,
and do not necessarily reflectthe view of dress or any of its officials.
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