Effect of the Social Security Windfall Eliminations Provision

[Christopher]

It strikes me as profoundly unfair that the WEP was designed to surcharge all workers with fewer than 30 years of payments to social security who are receiving a pension from a state, county or local (including school districts) entity. I have read that the reason for this is that the social security payment is progressive (paying a higher percentage to lower wage workers) to make up for a lifetime of lower wage employment.

The WEP is designed to protect social security from the class of persons (Class A) who work many years in the public sector to obtain a large pension, who THEN take a private sector position and pay into social security the minimum of 40 quarters (10 years) and then get the benefit of the higher (progressive) social security payment and the government pension.

Okay, fair enough. What about that class of workers (Class B) who do just the opposite, i.e., work for many years in the private sector but did not have many years of income large enough to be credited by social security (due to higher education attainment, marriage, unemployment, very low-wage employment, sickness, and the like). When that class of persons takes a government position and vests (usually 10 years), the WEP is applied to this class of workers as well.

My point is that it would be very easy for social security to just look at the earnings record to see if the person is a member of Class A or Class B. Members of Class B should not have the Windfall Eliminations Provision reductions applied to their social security benefit because they do not fall into the class that the legislation was enacted to defend social security against.

Thoughts?

 

[Teacher Terry]

I totally agree with you. I stayed home with my kids and then went to college and then graduate school twice. Needless to say I got a late start to working for the state and only have 15 years. My SS should be 800 but I only get half. When I moved to Nevada to work for the state I had no idea that they didn’t pay into SS. I have always felt that there should be more than one way to make it fair for various situations.

 

[Aunt Bea]

We all face different rules and challenges in planning our financial future.

The important thing is to understand the rules going in and adapt your individual situation to them.

As an example, I worked for a private company that ended the traditional pension program in favor of a 401K plan.

I knew it would be up to me to take control of my financial future.

“You have to learn the rules of the game. And then you have to play better than anyone else.”
- attributed to Albert Einstein

 

[Alligatorob]

It strikes me as profoundly unfair that the WEP was designed to surcharge all workers with fewer than 30 years of payments to social security who are receiving a pension from a state, county or local (including school districts) entity. I have read that the reason for this is that the social security payment is progressive (paying a higher percentage to lower wage workers) to make up for a lifetime of lower wage employment.

Nothing fair or logical about SS, but you can count on them making it as complicated as possible.

I don't see the logic behind government jobs not paying into SS, however given that is what happens why not just ignore those earnings when calculating SS? Seems a lot simpler and fairer.

 

[OneEyedDiva]

I agree that it's unfair. I have a cousin who was affected by WEP. I agree with @Alligatorob's first sentence. I was blessed though because I worked for municipal then state government agencies (in the same office). They had the same pension plan and both took out for SS, so I wasn't affected by the WEP.