Government Pension Offset and Windfall Elimination Provision

The Government Pension Offset (GPO) affects spousal Social Security by reducing benefits by two-thirds of what their TRS pension is; in many cases eliminating the Social Security benefit entirely. The Windfall Elimination Provision (WEP) never totally reduces Social Security benefits, but does significantly reduce it by using a modified formula to calculate benefits earned by the individual. Click here for the latest GPO and WEP brochure.

Is Congress Even Listening? The Latest on TRTA Efforts to Repeal the GPO and the WEP 
(The Voice, Third Quarter 2007 issue)
To read more about this artice written by TRTA Executive Director Tim Lee, click here.

The Government Pension Offset (GPO) eliminates or reduces the spousal Security benefit by two-thirds the value of a teacher’s retirement benefit.  This deduction occurs whether the Social Security receiving spouse is alive, deceased, or divorced.  Remember, the GPO only impacts those individuals who were not eligible to retire prior to December 31, 1982 (at least age 55 and twenty years of credible service.)  The following examples help clarify how the GPO can affect an individual in these different circumstances.

Michael collects a Social Security benefit of $800 per month.  His wife, Jan, who is a retired public school teacher, worked for a school district that did not pay Social Security on its employees.  Jan receives a monthly teacher annuity of $1,200. For the purpose of this example, both Michael and Jan are age 65 or older.

 

 

Effect of GPO with Living Spouse 
Jan’s potential Social Security:             Benefit: $800 x 1/2 = $400
Amount Calculated for GPO reduction:  $1, 200 x 2/3 = $800
Total monthly Social Security benefit:    $400 - $800 = No benefit
Effect of GPO upon Death or Divorce
Jan’s potential Social Security Benefit:   $800
Amount Calculated for GPO reduction:   $1,200 x 2/3 = $800
Total Social Security Benefit:                $800 - $800 = No benefit

 

These examples illustrate a complete offset, whereas in other situation there may not be a complete offset.  It is important to remember that in cases where a complete offset has not occurred, any increase in the teacher’s benefit will result in a recalculation of the Social Security benefit.  In other words, as the teacher’s annuity goes up, the Social Security benefit goes down.

GPO/WEP Sample Letter

A sample letter is provided below for TRTA members to use when contacting their Congressional representatives in both the US Senate and the House.

TRTA is pressing Congressional leaders to have a hearing on this issue as quickly as possible. Representative Charles Rangel (D-NY), Chairman of the House Ways and Means Committee, and Representative Michael McNulty, Chairman of the House Ways and Means Subcommittee on Social Security, have both indicated that a hearing on the GPO and the WEP will occur early next year. TRTA has asked to be on the list of organizations asked to testify during that hearing. Sample letter below.

Dear U.S. Senator/U.S. Representative:

I am a retired public educator from (insert where you taught) writing you about two unjust social Security provisions that affect hundreds of thousands of retired educators and other public employees across the country. These provisions are known as the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP). I urge Congress to enact legislation repealing these two Social Security provisions.
The Government Pension Offset (GPO) eliminates or reduces the spousal Social Security benefit by two-thirds the value of a teacher’s retirement benefit. The WEP reduces (but does not eliminate) a portion of an individual’s Social Security earned from other work outside of his/her public employment.
I am affected by the (insert your personal story here about how the GPO, the WEP or both have affected you).
U.S. Representative Buck McKeon (R-CA introduced HR 82 that calls for complete repeal of both the GPO and WEP. U.S. Senator Diane Feinstein (D-CA) introduced S 206 as a companion bill in the Senate. I am asking that you support this legislation to repeal the GPO and WEP.

The repeal of the GPO and the WEP would greatly benefit thousands of public servants now being penalized for their lives’ work. Lawmakers have promised to help seniors with various programs or reforms. These are hard times for seniors living on fixed incomes. The costs of health insurance, prescription drugs and general cost of living expenses continue to increase. Thank you for taking the time to consider this issue. I look forward to hearing from you on how you will help in this endeavor.

Table A & B

The formula used for calculating the first portion of the Social Security benefit will be reduced if you have less than 30 years of “substantial” earnings in Social Security. Table A  illustrates the amount of earnings Social Security considers “substantial” for various years.

Table B illustrates the reduced percentage used to calculate the first portion of your Social Security benefit based on less than 30 years of "substantial" earnings in Social Security.

Contact a Social Security representative (800.772.1213 or www.ssa.gov) to verify your years of "substantial" earnings and request a calculation of your Social Security benefit.
Table A
Year                   Substantial Earnings
1937-50            900
1951-54            900
1955-58            1050
1959-65            1200
1966-67            1650
1968-71            1950
1972                 2250
1973                 2700
1974                 3300
1975                 3525
1976                 3825
1977                 4125
1978                 4425
1979                 4725
1980                 5100
1981                 5550
1982                 6075
1983                 6675
1984                 7050
1985                 7425
1986                 7875
1987                 8175
1988                 8400
1989                 8925
1990                 9525
1991                 9900
1992                 10350
1993                 10725
1994                 11250
1995                 11325
1996                 11625
1997                 12150
1998                 12675
1999                 13425
2000                 14175
2001                 14925
2002                 15750
2003                 16125
2004                 16275
2005                 16725


Table B*

Years of
Substantial Earnings       Percentage
30 or more                       90 percent
29                                     85 percent
28                                     80 percent
27                                     75 percent
26                                     70 percent
25                                     65 percent
24                                     60 percent
23                                     55 percent
22                                     50 percent
21                                     45 percent
20 or less                        40 percent
*Percentage Used for Calculating First Portion of Social Security Benefit