Wednesday, February 07, 2007

SSA tidies website, seems to offer more details on Windfall Elimination Provision


SSA (the image there is not clickable on the blog go to http://www.ssa.gov) seems to have tidied up its website, and has added a rolling newsfeed in the upper lefthand corner. It warns that the rules for Government Pension Offset were tweaked in 2004. The home page gives handier reference to the essential information on the rules that will affect most potential and actual beneficiaries.

There appears to be some extended discussion of the Windfall Elimination Provision, which bears some relationship to the Government Pension Offset. Some local, state, and government employers (including the federal government until around 1983) offered self-contained retirement plans and did not deduct FICA taxes. Persons who draw a pension from these sources may have social security benefits reduced somewhat. For every year of a person's work history, there is a threshhold amount of FICA earnings that define "substantial FICA earnings" for that year. The more years of substantial earnings, the less the offset. With thirty or more years, there is no offset. At the other end, the offset could be as much as half of another government's pension. In some communities this affects teachers a lot, whose retirement plans are unusual enough that some insurance companies (like ING) offer to sell annuities especially designed for them.

A person might get a lump sum payout when leaving a non-FICA government employer after a short period (not long enough for vesting). That would be a reimbursement that would not include an employer contribution, in most cases. It is not absolutely clear from the rules on the SSA site (or their application for benefits form) how this is handled. But it would sound like, if you simply got your contributions back, there is no penalty, but you don't get any FICA credit for that period of employment (for example, toward the 40 covered quarters) because you were not covered then. This kind of problem probably would need the attention of a social security and benefits attorney in some detailed cases.

SSA had a temporary shutdown Feb 6 and 7 on beneficiaries seeing their benefits; this seems to be fixed. SSA is often making security changes to the website and seems to have occasional extended maintenance outages.

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