Nearly all public employees receive some type of job-related pension and while most of those employees participate in the Social Security system, nearly 28 percent do not. A new website will help state and local government employees nationwide with their retirement plans by explaining who among them is eligible to receive Social Security benefits, approximately how much they can expect to receive, and the federal government rules that affect pension-earning government workers.
The website, www.governmentpensionoffset.com, includes an overview of the impact of public pensions on Social Security benefits, a discussion of the federal Windfall Elimination Provision and Government Pension Offset, and commonplace rumors regarding pensions and Social Security. The website was developed by Daniel W. Ryan, a widely-respected pension expert and author.
“Retirement income is often thought of as a ‘three-legged stool’ of personal savings, pension and Social Security. For most state and local government employees, the personal savings part is their public employee deferred compensation plan at work and their pension leg is usually very solid,” Ryan said. “But Social Security benefits can be a bit murkier because some public employees, such as teachers, police officers and firefighters, often to not participate in the Social Security system. This new website helps all public employees with the information they need to understand this benefit landscape.”
Nearly 6.5 million state and local government employees do not participate in Social Security. These public servants need to know the rules and their projected benefits in order to plan for a secure retirement. Nationwide, that group includes most public employees in Alaska, Nevada, Colorado, Louisiana, Maine, Ohio and Massachusetts. Additionally, many public-school teachers are excluded from Social Security in Texas, Georgia, Missouri, Illinois, California,
Connecticut, Rhode Island and Washington D.C. Also, police and fire professionals are
In Illinois, this Social Security-excluded group includes public school teachers, public university employees, Chicago and Cook County employees and related agencies, and most police and fire personnel in downstate pension systems.
For retirees who have a pension from work outside of the Social Security system, the monthly benefit they earn is calculated using the Windfall Elimination Provision (WEP). The website guides users through this calculation and helps them to better understand their total expected retirement income.
The website also explains another provision that may affect the Social Security benefit received by a retiree with a state or local government pension, the Government Pension Offset (GPO). The scope of the Government Pension Offset is limited, and it affects only the Social Security benefits that retirees might receive from a spouse’s Social Security record.
“It is extremely important for affected public employees and retirees to understand how the Social Security component of their retirement works,” said James McNamee, President of the Illinois Public Pension Fund Association (IPPFA). “This website will help them achieve that goal.”
Daniel W. Ryan, the website’s author, a project coordinator for the IPPFA. He has had careers in municipal finance and as a health and pension plan administrator for a large union-employer plan. Ryan has served as a trustee of the Skokie, Illinois Police Pension Fund for more than 30 years. He is the main author of the IPPFA Retirement Guide for Illinois police and fire professionals.