Social Security Administration SSA Offsets February 22 2018

Social Security Administration (SSA) Offsets February 22, 2018

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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

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.

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

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

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.

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, 1982. • 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.

GPO example (total offset) EXAMPLE: Your spouse’s Social Security (SS) benefit is $1, 200. Before GPO Offset Your TRSL benefit Your SS spousal pension Your TOTAL SS & TRSL benefit $ $ After GPO Offset 900 600 $1, 500 Your TRSL benefit $ 900 Your SS spousal pension $ 600 GPO offset: -$ 2/3 of TRSL benefit 600 Your SS spousal pension after GPO offset 0 Your TOTAL SS & TRSL benefit (TRSL only) $ 900

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

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

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, 1985. • Were age 62 or acquired a disability before 1986. • Are a member of TRSL Plan B (school food service workers who also pay SS taxes).

WEP substantial earnings Years Substantial earnings 1937 -1954 $ 900 1984 $ 7, 050 2001 $ 14, 925 1955 -1958 $ 1, 050 1985 $ 7, 425 2002 $ 15, 750 1959 -1965 $ 1, 200 1986 $ 7, 875 2003 $ 16, 125 1966 -1967 $ 1, 650 1987 $ 8, 175 2004 $ 16, 275 1968 -1971 $ 1, 950 1988 $ 8, 400 2005 $ 16, 725 1972 $ 2, 250 1989 $ 8, 925 2006 $ 17, 475 1973 $ 2, 700 1990 $ 9, 525 2007 $ 18, 150 1974 $ 3, 300 1991 $ 9, 900 2008 $ 18, 975 1975 $ 3, 525 1992 $ 10, 350 2009 -2011 $ 19, 000 1976 $ 3, 825 1993 $ 10, 725 2012 $ 20, 475 1977 $ 4, 125 1994 $ 11, 250 2013 $ 21, 075 1978 $ 4, 425 1995 $ 11, 325 2014 $ 21, 750 1979 $ 4, 725 1996 $ 11, 625 2015 -2016 $ 22, 050 1980 $ 5, 100 1997 $ 12, 150 2017 $ 23, 625 1981 $ 5, 500 1998 $ 12, 675 2018 $ 23, 850 1982 $ 6, 075 1999 $ 13, 425 1983 $ 6, 675 2000 $ 14, 175

Formula for determining WEP formula First $895* 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, 397* of earnings is multiplied by 32%. Finally, the remainder is multiplied by 15%. • Dollar amounts are subject to change each year. Important: The WEP reduction is limited to ½ of your TRSL monthly benefit.

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%

WEP example $1, 000 monthly average Social Security benefit Social Security with government pension $895 × 40% = $358 $105 × 32% = $33. 60 SS pension = $391. 60 39. 1% of benefit Important: The WEP reduction is limited to ½ of your TRSL monthly benefit.

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: www. ssa. gov • Toll-free: 1 -800 -772 -1213 (Mon - Fri, 7 am - 7 pm) • Contact your nearest SS office

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

Questions?

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!

www. TRSL. org Find it online… • Forms • Brochures • Newsletters • & More!

We are here for you! Local phone: (225) 925 -6446 Toll free (outside Baton Rouge): 1 -877 -ASK-TRSL (1 -877 -275 -8775) Website: www. TRSL. org Email: web. master@trsl. org Like us on Facebook! Follow us on Twitter!