Will Your Social Security Get Whacked by the WEP?

One cause for concern: some research indicates that the WEP is regressive–that is, it disproportionately affects low-income workers who most benefit from Social Security. The argument here is that the WEP adjustment affects only the first bracket of the benefit formula, causing a proportionately larger cut to workers with lower AIMEs and benefit amounts.

The impact of the WEP is reduced for workers who spend 21 to 29 years in Social Security-covered work, and it is eliminated entirely for those who spend 30 years or more in such jobs.

For federal employees, the WEP applies only to workers who started their federal employment before 1983, were covered by the Civil Service Retirement System, and did not contribute to Social Security.
The provision does not apply to people covered by the newer Federal Employees Retirement System, which is a defined contribution plan. Those workers contribute to Social Security.

The cuts can come as a surprise when workers file for benefits. Until 2005, no law required employers to tell workers they were affected. Even now, they must only inform new workers of the possible impact on Social Security benefits earned in other jobs.

The annual statement of benefits issued by the Social Security Administration has included a description of the possible impact of the WEP and the GPO since 2007; for workers who are affected, the statement includes a link to an online tool to help them calculate the impact.

People who have worked only in jobs not covered by Social Security get a letter indicating that they are not eligible.

For more on the WEP and GP, consult this resource page on the Social Security Administration website.

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