Expert's View

If you are going to receive an annuity from the Civil Service Retirement System (CSRS) and your spouse will be receiving one from Social Security, you’ll be hit by the Government Pension Offset (GPO). Because of that unpleasant little wrinkle in the law, your Social Security spousal benefit will, in most cases, be reduced or eliminated.

If you are a CSRS employee – not CSRS Offset or FERS – the GPO will cut your Social Security spousal benefit by $2 for every $3 you receive in your CSRS annuity. This means that if you are eligible for a monthly CSRS annuity of $1,800, two-thirds of that – $1,200 – will be used to offset your monthly Social Security spousal benefit. If that benefit were $1,300, you would receive only $100 a month from Social Security. That’s because $1,200 subtracted from $1,300 leaves a positive balance of only $100.


Obviously, the more money you receive in your CSRS annuity, the less you’ll receive from your spousal Social Security benefit. For example, if you had a monthly CSRS annuity of $2,400 and a monthly spousal Social Security benefit of $1,200, you wouldn’t get a dime from Social Security. Two-thirds of $2,400 is $1,600. Subtracting that from $1,200 leaves you with nothing. Since CSRS annuities are usually much greater than Social Security spousal annuity benefits, the GPO usually wipes out the latter benefit.

There are two bills in the Congress that would repeal the GPO (S-349 and HR-594). However, the outright repeal of the GPO is highly unlikely. What is more likely to happen is that it will be modified to reduce its impact on those with low (very low) combined incomes. S-363, introduced by Senators Mikulski, Sarbanes, Daschle, Kennedy and Clinton, is just such a bill. And there are other variations on this theme – for example, creating a $1 for $3 offset rather than $2 for $3 — buried in the fine print of a series of bills titled “Social Security Protection Act of 2003.”