Heads up! This is not the most updated information on this topic. With the passage of the Social Security Fairness Act in January 2025, the impact of WEP on CSRS and CSRS Offset pensions was largely eliminated. Check out our article on Understanding the Social Security Fairness Act: What Feds Need to Know for the latest updates.
For many federal employees and public servants who fall under the Civil Service Retirement System (CSRS), the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) have put a strain on retirement planning.
Since CSRS employees do not pay into Social Security during their federal careers, they are impacted by these provisions if they qualify for Social Security benefits from other employment. That's because the WEP reduces Social Security benefits for Feds with both federal pensions and Social Security. Likewise, the GPO limits spousal and survivor Social Security benefits for Feds receiving federal pensions.
A bill, known as the Social Security Fairness Act, is aimed at repealing both WEP and GPO. Recently, it gained considerable traction in Congress.
In September 2024, the WEP and GPO repeal bill hit a milestone, gathering enough signatures to force a House floor vote. With strong bipartisan support, there’s a renewed hope that lawmakers will address the problems with WEP and GPO, potentially restoring full Social Security benefits to millions of retirees.
How WEP and GPO Affect CSRS Employees
The WEP reduces Social Security benefits for CSRS employees who qualify for Social Security from other jobs that did contribute to Social Security. The intention of WEP was to prevent workers from receiving an unearned 'windfall' or 'double-dipping.' In other words, it aimed to adjust Social Security benefits for those who hadn't paid into the system for part of their careers.
However, in practice, the WEP often results in a greater reduction in Social Security benefits than anticipated. In some cases, the pension isn’t high enough to fully replace the lost Social Security income, leaving retirees with a financial gap.
Similarly, the GPO reduces or potentially cuts off spousal and survivor Social Security benefits for those receiving a CSRS pension. For example, if a CSRS employee qualifies for a pension based on their federal work and is also eligible for Social Security spousal benefits through a spouse’s earnings, GPO may reduce those spousal benefits. Typically, the GPO reduces spousal benefits by two-thirds of the CSRS pension amount.
In some cases, this reduction is large enough that it completely eliminates the spousal or survivor benefits, leaving retirees without additional Social Security benefits.
Current Status of the Repeal Bill and Legislative Path Forward
Reaching the required number of signatures guarantees lawmakers will soon vote on whether to repeal the WEP and GPO. Bipartisan support for the bill highlights the growing recognition of the potential financial strain these provisions place on Feds and public servants.
The next step is a full House vote. If the House approves the bill, it will proceed to the Senate, where it may face further review or amendments before a final vote. Should the bill pass in both chambers without changes, it will go to the President for approval and enactment.
Despite its progress, the bill may still face obstacles. The Senate’s crowded agenda and possible amendments could slow down the process or alter its original intent. For CSRS employees, it will be important to track the bill’s progress, as any WEP and GPO repeal update has the potential to significantly affect retirement planning.
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What Repealing WEP and GPO Could Mean for CSRS Retirees
If WEP and GPO are repealed, many impacted workers would see a significant increase in Social Security benefits. For those impacted by WEP, the change would restore their full Social Security benefits, allowing them to receive both their CSRS pension and the Social Security income earned through other employment.
Removing GPO would improve financial security for families who rely on spousal benefits. With Social Security benefits fully restored, retirees receiving spousal or survivor benefits could enjoy a more predictable income. This change may provide greater flexibility to handle retirement expenses such as healthcare costs, inflation, and other costs that typically grow with age.
Planning for Potential Changes
As CSRS retirees await the potential repeal of WEP and GPO, it’s important to understand how these changes may impact retirement planning. If the current bill is passed, restored Social Security benefits will create greater stability in retirement for many.
Regardless of the outcome, those affected by WEP and GPO may benefit from reviewing their financial plan. Preparing for multiple scenarios may help ensure retirees are positioned to handle both expected and unexpected costs in retirement. By proactively assessing financial strategies, impacted employees can create a retirement plan that offers flexibility and stability, regardless of the bill’s outcome.
A CERTIFIED FINANCIAL PLANNER™ professional can offer valuable insights into how these changes might impact your financial situation and discuss strategies to optimize your retirement income. For a personal consultation, reach out to the team at Serving Those Who Serve at askstws@stwserve.com.
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 Serving Those Who Serve writers and not necessarily those of RJFS or Raymond James. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy suggested. Every investor’s situation is unique and you should consider your investment goals, risk tolerance, and time horizon before making any investment or financial decision. Prior to making an investment decision, please consult with your financial advisor about your individual situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. **
