Will the WEP and GPO finally be eliminated? Legislation first introduced in 2021 is receiving push from Congress to see that the bill receives a vote.
In the world of government service – on the local, state, and federal levels – one of the biggest perks for employees is the pension they’re due to receive. Some of these retirement plans are considered “covered” and workers who contribute to these plans also put a portion of their paychecks into Social Security. “Non-covered” pensions, such as the Civil Service Retirement System (CSRS) for feds hired between 1920 and 1983, does not have a Social Security component. A law from 1977 took this fact into account and created two controversial regulations known as the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO).
The GPO only impacts social security benefits when the spouse or widow(er) of the employee, who contributed to a non-covered pension, are claimed. (CSRS-offset employees don’t have to worry about the GPO, read Ed’s article for more information.)For the retirees who are living and collecting their own retirement income, contributions to a non-covered pension can trigger the WEP, reducing any social security benefit they’re entitled to.
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Recent Push to Eliminate GPO & WEP
In January of 2021, HR-82, the Social Security Fairness Act, was introduced in the House of Representatives by Illinois Republican Rodney Davis. A similar bill, S-1302, was brought forth in the Senate by Democrat Sherrod Brown of Ohio just a few months later on April 22nd. Neither of these proposed laws made it out of Congressional committees, but Representative Davis has secured enough sponsors that allow the bill to be considered for a vote without a committee’s thumbs-up. This leaves the ultimate decision about whether or not the House will vote on HR-82, up to the Speaker, Nancy Pelosi. In addition to Davis garnering the necessary amount of bipartisan sponsors for the bill, Representative Clay Higgins, a Republican from Louisiana, has attempted to personally persuade Pelosi to hold the vote over the last few weeks. It should be noted that Govtrack.us has both bills’ chances of passing at 2%.
Until Next Time,
**Written by Benjamin Derge, Financial Planner, ChFEBC℠ The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Benjamin Derge and not necessarily those of RJFS or Raymond James. Links are being provided for information purposes only. Expressions of opinion are as of this date and are subject to change without notice. Raymond James is not affiliated with and does not endorse, authorize, or sponsor any of the listed websites or their respective sponsors.