Learn how the Social Security Fairness Act affects retirement benefits for public servants by eliminating the WEP and GPO provisions. Essential reading for government workers and their spouses planning for retirement.

Understanding the Social Security Fairness Act: What It Means for Public Servants

For millions of public servants across America, retirement planning comes with unique challenges due to two controversial Social Security provisions: the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). The Social Security Fairness Act eliminates these provisions, changing the retirement landscape for public sector workers.

The Challenge for Public Servants

Many public sector employees, including teachers, firefighters, and police officers, work in positions not covered by Social Security. Instead, they contribute to separate pension systems. While this appears straightforward, complications arose under the prior law when these workers also earned Social Security benefits through other employment or were eligible for benefits through their spouses.

Understanding the Windfall Elimination Provision (WEP)

The WEP affects workers who receive pensions from non-Social Security covered employment but have also earned Social Security benefits through other jobs. Under this provision, their Social Security benefits can be reduced depending on their work history. This can have a significant impact, and, in some cases, it may be higher than $600 per month.

Consider a teacher who worked summers in Social Security-covered employment or had a private sector career before teaching. Despite paying into Social Security during those periods, their benefits could be significantly reduced simply because they also receive a teacher's pension.

Government Pension Offset (GPO) Impact

The GPO's effects can be even more severe for spouses and survivors of public servants. This provision reduces Social Security spousal or survivor benefits by two-thirds of the government pension amount. For many retirees, particularly those with modest pensions, this can eliminate their spousal or survivor benefits entirely.

For example, a retired state employee receiving a monthly pension of $3,000 would see their potential Social Security spousal benefits reduced by $2,000 (two-thirds of their pension). If they were eligible for a monthly spousal benefit of $1,500, the GPO would eliminate it entirely.

The Social Security Fairness Act’s Changes

The Social Security Fairness Act was signed into law on January 5^th, 2025, and is retroactively effective as of January 2024. The new law eliminates both the WEP and GPO, allowing public servants and their spouses to receive their full earned Social Security benefits. This change will particularly benefit several groups of workers and retirees, including career-switching professionals who have worked in both public and private sectors, public servants who held multiple jobs to make ends meet, and surviving spouses of public employees who depend on both pension and Social Security benefits.

Planning Implications

For those currently planning for retirement, the elimination of these provisions may significantly impact their financial futures.

Current workers affected by these provisions should:

• Carefully review their Social Security statements and pension benefits
• Consider how these provisions might affect their retirement income
• Consult with financial professionals familiar with public sector retirement planning

Since the new law is retroactively effective as of January 2024, the Social Security Administration has the task of making “back payments” to retirees who were subject to WEP and GPO within the past 12 months. The Social Security Administration has not yet addressed how they will implement the new law, so retirees and current workers should remain informed about the implementation.

To find additional information on the Social Security Fairness Act, visit www.ssa.gov.

For more information on how this new law might impact you, connect with the team at EP Wealth Advisors.

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