Social Security Matters – About The Fairness Of “WEP” And “GPO”

Dear Rusty: I was married to my ex-husband for 30 years. For 14 of those years, I was an unemployed mom and community volunteer. After my sons were grown, I began teaching in California and earned a teacher pension. That teacher pension eliminates ALL the spousal benefits my husband paid for. How can that be justified? I, like a number of my retired friends, rent out rooms in my house to be able to live on a small teacher’s pension and get none of my earned spousal benefits. Signed: Frustrated Teacher

Dear Frustrated Teacher: I can only say that your frustration is shared by many retirees from public service in States which do not participate in the federal Social Security program – that is, neither the employee nor the State contribute to the federal Social Security program. There are about 26 states (including California) which exempt at least some of their employees (and themselves) from paying Social Security payroll taxes, but those states are obligated to provide retirement benefits robust enough to offset the loss of Social Security benefits which will occur later in life after the employee retires. As controversial as these laws – the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) – are, they have withstood legal challenges since they were enacted four decades ago.

Because you have a “non-covered” pension from your state employment, WEP reduces any personal Social Security retirement benefit you may have earned elsewhere and, to your specific point, the GPO has eliminated the spousal benefit you might otherwise have been entitled to from your ex-husband. Like you, many who are affected believe this to be unfair, but Congress has steadfastly failed to enact legislation to repeal these provisions, or even to soften their impact. The likely reason is that Congress has evaluated the fundamental premise of the provisions and concluded they appropriately equalize the way benefits are paid to all Social Security beneficiaries.

It might help to think of it this way: in normal circumstances, if one spouse has a personally earned Social Security retirement benefit which is more than 50% of their partner’s full retirement age (FRA) amount, no spousal benefit is paid (the spouse benefit is offset by the recipient’s own SS retirement benefit). The GPO (the provision which affects SS spousal and survivor benefits) applies that same logic for a spouse who has a “non-covered” pension earned outside of the Social Security program, their spousal benefit is offset by the amount of the person’s own “non-covered” retirement pension. The one difference is that the GPO offset is actually a bit smaller (2/3rds of the non-covered pension vs. 100% offset for a spouse with their own SS retirement benefit). 

Both WEP (which reduces SS retirement benefits) and the GPO (which reduces spousal or survivor benefits) are consequences of working for a State which has chosen to not participate in the federal Social Security program, and those states are obligated to inform their employees of those consequences. I know that doesn’t make your situation any less frustrating, but Congress “justifies” these provisions as being necessary to equalize how benefits are paid to all Social Security beneficiaries. There are about 2 million beneficiaries affected by WEP and over 700,000 affected by the GPO, most of whom share your displeasure. Nevertheless, Congress has so far maintained both these provisions as originally enacted. If you wish to add your voice to those who believe WEP and GPO are unfair, you may wish to contact your federal Congressional Representatives to express that point. 

This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (amacfoundation.org/programs/social-security-advisory) or email us at ssadvisor@amacfoundation.org.