Social Security Administration (SSA) Offsets

Transcription

1 Social Security Administration (SSA) Offsets February 24, 2016

2 What we will discuss Statement Concerning Your Employment in a Job Not Covered by Social Security (Form 2SS) 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) Social Security Administration contact information

3 You must have new hires complete The Social Security Act of 2004 requires public employers (outside of the Social Security system) to notify individuals who start work about the effects of the Social Security offsets. You may have new hires complete the Form SSA-1945 from the Social Security Administration. You are required to send copies of the form to TRSL.

4 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.

5 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

6 Offset provisions Government Pension Offset (GPO) 1982 Windfall Elimination Provision (WEP) 1985

7 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.

8 Exceptions to GPO offset: GPO does not affect you if you: Were eligible to retire from your non-covered employment before December Were eligible to retire from your TRSL covered employment by June 30, 1983 and you were receiving one-half of your support from your spouse at that time. Are a member of TRSL Plan B (or other government job paying into SS) during the last five years of employment.

9 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

10 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 and $600 TRSL) $ 800

11 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

12 Act 154 of 1985 (Louisiana law) Provides for early retirement of members with at least 10 years by September 1, 1985 Any member who had earned service credit to be eligible for a normal retirement on or before 08/31/1995, but had not, on 09/01/1985, attained the normal retirement age, shall, during the ten year period from 09/01/1985 through 08/31/1995, be eligible for an early retirement, regardless of age using the retirement formula. (Actuarially reduced)

13 Exceptions to WEP offset: WEP does not affect you if you: Have 30 full years of substantial earnings under SS Were eligible to retire from your TRSL covered employment by December 31, 1985 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, $ 22,050

15 Formula for determining WEP WEP formula First $826* of earnings is multiplied by a factor between 40% to 90%. (Percentage depends on the number of years of substantial earnings.) Next, up to $4,980* 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 $826 40% = $330 $174 32% = $55 SS pension = $ % of benefit

18 Contacting the SSA Website: Toll-free: (7 a.m. 7 p.m., Mon. Fri.) Visit your nearest SS office

19 Let s review what we discussed Have new hires complete the Form 2SS; submit to TRSL. SSA provisions reduce social security benefits. SSA provisions do not reduce TRSL benefits. For detailed information on what you may be eligible to receive from SSA, contact the Social Security Administration.

20 Use our online Procedures Manual Available at

21 What s coming up? Register online at March 7 Comprehensive Training - K-12 Group March 8 Comprehensive Training Charter Schools March 9 Comprehensive Training State Agencies March 10 Comprehensive Training Higher Ed. April 6 Return to Work Webinar

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