Retirement & Financial Planning Report

Some retirees affected by the “government pension offset” may get relief from that reduction due to promised actions by the Social Security Administration in response to an inspector general audit.

The offset, commonly known as the GPO, reduces Social Security spousal or survivor benefits by $2 for each $3 the beneficiary receives in an annuity from a retirement system that does not include Social Security. That is an issue for many CSRS retirees—as well as to current CSRS employees on their eventual retirement—since that system does not include Social Security. In many cases, the effect of the GPO is to eliminate a spousal or survivor Social Security benefit through a spouse’s Social Security-covered employment.

ADVERTISEMENT

The IG report, issued late last year, found that the SSA was not always following its policies regarding explaining that offset, including that by delaying claiming benefits, some beneficiaries could avoid it because delaying raises the Social Security benefit against which the offset is applied. It said that in a sample of 200 persons who lost their entire survivor benefit to the GPO, the SSA did not inform 71 of the option to delay receipt of the benefit and that 18 of those would have been eligible for some Social Security benefit had they delayed.

From that sample, the IG estimated that thousands of beneficiaries may be having their Social Security benefits reduced when they could have avoided it by waiting to collect those benefits, worth tens of millions of dollars in lifetime benefits.

The Office of Special Counsel noted in a letter to Congress and the White House that the report was spurred by a whistleblower’s allegations filed there which it referred to the IG’s office for investigation.

Said the OSC, “The agency provided a detailed plan to review and, where appropriate, reimburse both the group of beneficiaries identified in the audit’s random sample, as well as the remaining population of over 20,000 beneficiaries affected by this unique issue. The agency confirmed that it would send written notification to each of the affected beneficiaries advising them of their option to continue with their existing benefits or withdraw and resubmit for widow(er) benefits, at which point it would advise the beneficiaries of the advantages and disadvantages of filing a new application.”

“The agency confirmed it would review each new application on a case-by-case basis in accordance with agency guidelines. The agency also confirmed it had instituted new training and control measures to ensure that employees were alerted to their obligation to inform widow(er) claimants of these options going forward,” it said.

Average 2022 FEHB Premiums to Rise 3.8 Percent

COLA Count Creeps Up on 6 Percent

Who’s Not Affected by the Government Pension Offset

Report Lists Most Common Issues with Retirement Applications

Your Agency’s Role in Your Retirement Application

FERS Retirement Planning Bundle: 2022 FERS Guide & TSP Handbook