The windfall elimination provision and the government pension offset continue to be a topic of conversation among employees and retirees who are and were covered by the Civil Service Retirement System. For those of you who are a little hazy about why the WEP and GPO are such a big deal, let me give you a refresher course on their impact, and pass on one valuable fact that you may not know.
The WEP reduces – but does not eliminate – the Social Security benefit of anyone who is receiving an annuity in whole or part from a retirement system where he or she didn’t pay Social Security taxes – such as CSRS – and doesn’t have at least 30 years of coverage under Social Security. The GPO reduces or eliminates the spousal Social Security benefit on anyone who is receiving an annuity from a retirement system where he or she didn’t pay Social Security taxes, such as CSRS.
While there have been desultory efforts over the years to modify or do away with these provisions of law, little headway has been made. In fact, the only piece of legislation on the subject that has made its way into law is one in 2004 that eliminated a loophole in the GPO that had been enjoyed by many state and local employees. Public Law 108-203 eliminated the “last day of covered employment” exemption, under which an employee could transfer from a retirement system like CSRS into a position covered by Social Security for one day and avoid the GPO. Now five years of coverage are required.
Now to that valuable fact I mentioned above. How many of you believe that the WEP applies to a spouse who will be eligible to receive a Social Security benefit and a CSRS survivor annuity? Let’s see a show of hands. Yep, it’s as bad as I thought. Most of you think it will. And, in most cases, you are wrong.
The WEP does not apply to a survivor annuity. As stated above, the WEP only applies to the Social Security benefit of someone who receives an annuity from a retirement system where he or she didn’t pay Social Security taxes. As a result, a spouse who is entitled to a Social Security benefit will get that benefit and the survivor annuity. Of course, if your spouse is also entitled to a CSRS annuity on his or her own work record, the GPO will apply, and the Social Security benefit will be reduced by $2 for every $3 in his or her CSRS annuity.
