Windfall Elimination Provision (WEP)
Employees who work for a Social Security-exempt agency for some or all of their careers may be impacted by the Windfall Elimination Provision (WEP). Workers and their employers need to not only understand the financial impact of the WEP on a worker but also possibly the impact on a worker’s spouse. The good news is that the WEP effect is not as severe as the rumor mill makes it out to be, and there are potential ways to reduce the financial impact.
And then there’s the Government Pension Offset (GPO). Workers need to recognize the GPO’s impact on their choice of using a voluntary retirement savings plan through their employer, such as a 401k or 457, and the impact on them if they anticipate receiving spousal or survivor benefits from Social Security.
If your agency/system pays into Social Security and your members are “off the hook,” why might you still want to know about these two topics? Employees nowadays are changing jobs and employers more frequently than in the past, so you may already have members in your system who worked in the past for a Social Security exempt agency. Or your members’ spouses might have worked for an exempt agency, and your member may look to you for education and understanding on these topics.