Social Security Administration (SSA) Offsets

Transcription

1 Social Security Administration (SSA) Offsets February 16, 2017

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4 Agenda Types of Social Security benefits:» Spouse s or widow(er) s benefit» Earned benefit Types of offsets:» Government Pension Offset (GPO)» Windfall Elimination Provision (WEP) Exceptions and examples SSA contact information

5 TRSL and Social Security Louisiana does not pay into Social Security for the majority of its public employees. However, you may still be eligible for Social Security through other employment or through your spouse s employment. The type of Social Security benefit you are eligible for determines which offset provision applies to you. Your TRSL benefit is not reduced.

6 Social Security benefits Spouse s or widow(er) s benefit: Paid to spouses or surviving spouses who did not work long enough to earn their own SS benefit or whose earned benefit is less than the pensioner s benefit Earned benefit: Paid to individuals who worked at other jobs, paying SS taxes long enough to earn a SS benefit

7 Offset Provisions Government Pension Offset (GPO) 1982 Windfall Elimination Provision (WEP) 1985

8 Government Pension Offset (GPO) Social Security benefits are reduced by two-thirds of your government pension (TRSL benefit). The law requires that a person s benefit as a spouse or widow/widower be offset dollar for dollar by the amount of his/her own retirement benefit.

9 Exceptions to GPO offset: GPO does not affect you if you meet one of the following exceptions: Were eligible to retire from your non-covered employment on or before November 30, Were eligible to retire from your TRSL covered employment before July 1, 1983 and you were receiving 50% of your support from your spouse at that time. Are a member of TRSL Plan B (school food service workers who also pay SS taxes). You withdrew your contributions to TRSL.

10 GPO example (total offset) EXAMPLE: Your spouse s Social Security (SS) benefit is $1,200. Before GPO Offset Your TRSL benefit $ 900 After GPO Offset Your TRSL benefit $ 900 Your SS spousal pension $ 600 Your SS spousal pension $ 600 GPO offset: 2/3 of TRSL benefit Your SS spousal pension after GPO offset - $ Your TOTAL SS & TRSL benefit $1,500 Your TOTAL SS & TRSL benefit (TRSL only) $ 900

11 GPO example (partial offset) EXAMPLE: Your spouse s Social Security (SS) benefit is $1,200. Before GPO Offset Your TRSL benefit $ 600 After GPO Offset Your TRSL benefit $ 600 Your SS spousal pension $ 600 Your SS spousal pension $ 600 GPO offset: 2/3 of TRSL benefit Your SS spousal pension after GPO offset - $ 400 $ 200 Your TOTAL SS & TRSL benefit $1,200 Your TOTAL SS & TRSL benefit ($200 SS + $600 TRSL) $ 800

12 Windfall Elimination Provision (WEP) Reduces your own SS benefit if you receive a government pension Uses a modified formula to compute SS benefit, based on average monthly earnings adjusted for inflation Does not eliminate SS benefit

13 Exceptions to WEP offset: WEP does not affect you if you meet one of the following exceptions: Have at least 30 full years of substantial earnings in a job where you paid Social Security taxes. Were eligible to retire from your TRSL-covered employment by December 31, Were age 62 or acquired a disability before Are a member of TRSL Plan B (school food service workers who also pay SS taxes).

14 WEP substantial earnings Years Substantial earnings Years Substantial earnings Years Substantial earnings $ $ 1, $ 1, $ 1, $ 1, $ 2, $ 2, $ 3, $ 3, $ 3, $ 4, $ 4, $ 4, $ 5, $ 5, $ 6, $ 6, $ 7, $ 7, $ 7, $ 8, $ 8, $ 8, $ 9, $ 9, $ 10, $ 10, $ 11, $ 11, $ 11, $ 12, $ 12, $ 13, $ 14, $ 14, $ 15, $ 16, $ 16, $ 16, $ 17, $ 18, $ 18, $ 19, $ 20, $ 21, $ 21, $ 22, $ 22,050

15 Formula for determining WEP WEP formula First $856* of earnings is multiplied by a factor between 40% to 90%. (Percentage depends on the number of years of substantial earnings.) Next, up to $5,157* of earnings is multiplied by 32%. Finally, the remainder is multiplied by 15%. * Dollar amounts are subject to change each year.

16 Determination of percentage Years of substantial earnings Percentage 30 or more 90% 29 85% 28 80% 27 75% 26 70% 25 65% 24 60% 23 55% 22 50% 21 45% 20 or fewer 40%

17 WEP example $1,000 monthly average Social Security benefit Social Security with government pension $856 40% = $342 $174 32% = $55 SS pension = $ % of benefit

18 Summary YES, it s possible to draw both TRSL and Social Security in retirement. The provisions of the Social Security Administration reduce the benefits provided by SS. TRSL benefits are not reduced. For detailed information about your Social Security benefit, please contact the Social Security Administration. Website: Toll-free: (Mon - Fri, 7 am - 7 pm) Contact your nearest SS office

19 Things to do now Register for Member Access. Submit copies of important documents:» Social security cards (member and beneficiary/ies)» Birth certificates (member and beneficiary)» Legal documents (including divorce decrees, judgment of separation, and/or community property settlements) Update address. Update beneficiary/ies. Get a retirement estimate submit Form 10 or on Member Access

20 Questions?

21 Online access to your TRSL account Member Access is a secure website where you have all the tools you need to plan for retirement: View service credit, contributions and beneficiary designations Create a benefit estimate Update your name or address Apply for retirement Create your account today!

22 Find it online Forms Brochures Newsletters & More!

23 We are here for you! Local phone:(225) Toll free (outside Baton Rouge): ASK-TRSL ( ) Website: Like us on Facebook! Follow us on Twitter!