Retirement & Financial Planning Report

Several federal employee organizations have said that an opportunity may be at hand to gain relief from two Social Security-related offsets affecting many federal retirees, although that relief may come as less than a full repeal.

The two provisions are called the government pension offset and the windfall elimination provision, both of which commonly affect those who are retired, or will retire, under the CSRS program which does not include Social Security. The former offset commonly reduces any personal Social Security benefit earned through other employment while the latter reduces and often eliminates a spousal or survivor Social Security benefit. While CSRS now makes up only about 5 percent of the active workforce, two-thirds of federal retirees went out under that system and about two-fifths of new retirees are under CSRS.

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Early last year bills were introduced in both the House and Senate to fully repeal those offsets and while those bills have attracted co-sponsors, especially in the Democratic-controlled House. However, the same has been true for many years and a full repeal bill never even has been brought out of committee for voting on the House or Senate floor.

Later in 2019, less ambitious bills also were offered, including several to soften the impact of the WEP reduction—which can reduce an earned Social Security benefit by as much as about $460 a month—by $100 or $150 a month. The latter measures are supported by several key Republicans as well as by Democrats.

“With the bipartisan support for a solution, there is renewed optimism that this issue will finally be addressed,” The Federal Managers Association recently said. However, it added that while it supports the bills calling for full repeal, “we recognize that full repeal of these unfair cuts to Social Security benefits would be costly and full repeal is unlikely. That is why FMA also supports efforts that seek partial repeal, to help mitigate these unfair penalties on civil servants.

The National Active and Retired Federal Employees Association similarly recently said that while it too supports full repeal, the bipartisan WEP bill “would provide much-needed relief from the penalty for those currently affected, and improve fairness for future retirees . .  we urge both sides of the political aisle to work together on a compromise that improves fairness, provides real relief for current retirees, and, importantly, passes into law.”

Continue reading at ask.FEDweek.com:

Government Pension Offset – GPO and Social Security

Windfall Elimination Provision – WEP and Social Security

Social Security Benefits in Federal Retirement