What the Social Security Fairness Act means for public servants The end of WEP and GPO Overview by Tim Lonergan, CFP®, CPWA®, Senior Financial Planner
Overview by Tim Lonergan, CFP®, CPWA®, Senior Financial Planner
16 January 2025
Nearly three million current and former public employees are set to receive increased Social Security benefits following the passage of the Social Security Fairness Act late last year.1
This bipartisan legislation repeals two provisions that had curtailed Social Security payments for individuals receiving benefits from other pension plans, such as those from a state or local government. These two provisions—the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO)—were designed to prevent workers from “double-dipping” into retirement benefits.
However, since implementation more than 40 years ago, there has been a consistent and often bipartisan appetite to address what beneficiaries have described as “punitive” benefit calculations. With the passage of the Social Security Fairness Act (HR 82), both the WEP and GPO provisions have officially been eliminated, resulting in increased benefits for teachers, firefighters, local government workers, and other public servants.
The WEP reduced Social Security payments for beneficiaries who were eligible for both retirement benefits and employment pensions not covered by Social Security. In essence, WEP functioned by modifying the benefit calculation formula to reduce the first bend point from 90% to as low as 40%, depending on the length of the beneficiary’s covered work history.2
Unlike WEP, the GPO provision impacted benefits that could be paid to spouses, widows, and widowers who were also receiving state or local government pensions of their own. The GPO calculation was more straightforward, reducing benefits by 2/3 of the pension amount.3 If a beneficiary’s pension was large enough, however, GPO could have eliminated the benefit entirely.
The Social Security Fairness Act passed Congress comfortably on Dec 20, 2024, in a largely bipartisan manner. The Act officially repeals WEP and GPO adjustments to impacted beneficiaries for any benefits payable from January 2024. As of this writing, the Social Security Administration is still assessing how to implement the law appropriately; however, beneficiaries do not need to take any specific action at this time.
Still, if you have a question about Social Security or any other retirement topics, please speak with your advisor, email advice@westmount.com or call us at 310-556-2502.
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Sources
1Congressional Research Service | Social Security
2SSA | Windfall Elimination Provision
3SSA | Government Pension Offset
Disclosures
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