Retirement & Financial Planning Report

A key House leader on Social Security issues has offered a bill targeting the “windfall elimination provision,” a reduction in benefits under that program affecting those also collecting an annuity from a retirement program not including Social Security, such as the federal Civil Service Retirement System.

The WEP reduces a Social Security benefit the person earned through other employment—typically before or after a federal career but in some cases during a career through work on the side—if the person had less than 30 years of earnings above a designated level. That figure rises each year; for 2021 it is $26,550, increasing to $27,300 for 2022.

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The maximum reduction works out to about $500 a month and is not as severe for those with between 20 and 30 years of such earnings.

The WEP long has been a sore point for the federal CSRS population, who now account for only several percent of active employees but who make up about six-tenths of current retirees. It does not apply in the FERS program because that includes Social Security. Numerous proposals to soften or end it have been introduced over the years but never have reached enactment.

The new bill (HR-5834) by the top Republican on the House Ways and Means Committee, Rep. Kevin Brady of Texas, would restore $100 of the monthly reduction for those already retired. For those not already retired a new formula would be created that would in many cases result in a lesser reduction; they would have the choice of the formula most beneficial to them.

The National Active and Retired Federal Employees Association noted that there are now several bills pending in Congress, sponsored by members of both parties, that would target the WEP in one way or another.

“There is broad support for dismantling these intolerable offsets; 283 House members have cosponsored at least one of these bills. That’s because the WEP has cost public servants billions of dollars in Social Security benefits that they rightfully earned,” it said.

“While NARFE’s ultimate goal is for Congress to fully repeal the WEP and the GPO, reform efforts such as the Equal Treatment of Public Servants Act are a good first step toward correcting this discriminatory provision. What’s crucial now is for members of both parties to seek common ground and finally provide relief to WEP-affected retirees,” it said.

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