Here are the basics of what you need to know about WEP, thanks to our partners at the National Education Association.
Whom does the WEP affect?
The WEP affects persons who:
- Work(ed) for a state or local government in non-Social Security covered employment (i.e. PERA);
- Are entitled to a government pension from that employment; and
- Are also entitled to a Social Security retirement or disability benefit from SS-covered work.
How does the WEP work?
The WEP reduces the factor by which average earnings are multiplied to determine Social Security benefits. The amount of reduction depends on when the person retires and how many years of earnings he or she has accumulated. The reduction may be no more than one-half of the government pension to which the person is entitled in the initial month of entitlement to the pension. For 2006, the maximum reduction is $328 a month.
Why did Congress enact the WEP?
SSA uses a formula for computing Social Security benefits that provides individuals with low average lifetime wages a proportionally higher rate of return on their contributions to Social Security than individuals with relatively high average lifetime wages. Those who have spent most of their careers in non-SS-covered employment with a state or local government and a minimal amount of time in SS-covered employment will appear to SSA as lower-paid workers. Congress enacted the WEP in the belief that one should not receive a Social Security benefit as a low-paid worker, plus receive a government pension from non-SS-covered employment.
Why is the WEP an unfair policy?
The WEP causes public employees outside the Social Security system, such as educators, to lose a significant share of their Social Security benefit. It fails to account for the severe effect of the WEP on low-wage state or local government employees. The WEP also affects the teaching profession as a whole. Some individuals in SS-covered employment may wish to make a career change and go into teaching. If the teachers in their state are impacted by the WEP, those individuals will be less likely to make the change.
What can be done to address the offsets?
Addressing the offsets requires congressional action. NEA seeks total repeal of both the GPO and WEP and supports legislation to this end. The Social Security Fairness Act would completely repeal the GPO and WEP.
READ MORE ABOUT WEP HERE!