Louisiana Social Security: What Louisiana State Public Employees Should Know

Louisiana teachers and social security

Louisiana state public employees face special challenges when it comes to figuring out their retirement benefits.  Most Louisiana state public employees, who may be covered by LASERS, LSERS, TRSL, or other public employee retirement plans, don’t pay into the Social Security system.  This means their ability to receive Social Security benefits is different from typical employment where the employee pays Social Security taxes.  The situation gets more confusing when an eligible employee has some Social Security covered employment and some non-Social Security covered employment.  Even worse, many people don’t learn about the rules until they reach retirement age, and they may have made decisions based on faulty information.

Thankfully, the rules aren’t too complicated, and I’m here to help you decipher them. 

There are two rules that apply here:  the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO).  These links give more detailed information about each rule, but here are summaries:

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Mailbag: Social Security Substantial Earnings and the GPO

answers to social security questions

Today’s question comes from Bob.

QUESTION

“Hi Devin, I just came across your website and found the articles on SS Windfall Elimination Provision and Government Pension Offset interesting reading.  I have tried to find an answer to a question but cannot do so; even SS personnel could not tell me the answer and I wonder if you would be so kind to address.

Specially, would the GPO apply in the following case.

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Ohio Social Security: What Ohio Public Employees Need to Know

Coordinating STRS, SERS, OPERS and Social Security Benefits

 

Ohio public employees and social security benefits

 

Ohio public employees have a right to be perplexed about their Social Security benefits. The rules for collecting STRS, SERS and OPERS and Social Security can be confusing and intimidating. It doesn’t help that there’s a lot of really bad information on the internet!

The good news is, the rules can made understandable so you can use them to your advantage in planning your retirement strategy.

The Basics of Social Security in Ohio

If you work in local or state government in Ohio, there are two rules that could affect your ability to claim 100% of your Social Security benefit. The rules are called the “Windfall Elimination Provision (WEP)” and the “Government Pension Offset (GPO).”

These two provisions reduce (or completely eliminate) benefits for individuals who worked at a job where they:
A) did not pay Social Security tax
and
B) earned a pension from that work

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The Social Security Benefit REDUCTION Act of 2015?

A.K.A The Equal Treatment of Public Servants Act of 2015

wep repeal social security

 

I really thought the repeal of the Windfall Elimination Provision through HR 711: The Equal Treatment of Public Servants Act of 2015  was a good idea.

I’ve changed my mind.

Read my original article on the repeal of the Windfall Elimination Provision

The spirit of the bill is great. Teachers, firefighters and other public servants often get the short side of the stick with Social Security and I thought this bill was going to go a long way towards fixing it. There were some lingering questions, but overall I was excited that some real action on this unequal treatment seemed poised to finally move forward.

That excitement was before I had a conversation with Dr. Andy Szakmary, a Professor of Finance at Richmond University. His take on this legislation was a little different than mine. He caught a few things in the Bill and supporting testimony that had slipped right by me. After several conversations with Dr. Szakmary, these are some of his comments and insight that really stood out to me.

“The primary problem with HR 711 is the 14 MILLION PEOPLE (according to Goss’ testimony, pp.3-4) who are not currently subject to the Windfall Elimination Provision (WEP) but will become impacted due to the formula change in HR 711.  (versus 1.25 million people who will receive a higher benefit than under the current formula)

So there will be 11 losers for every winner.

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Mailbag: CSRS and Social Security

answers to social security questions

Today’s question comes from M. in response to my article on the potential elimination of the Windfall Elimination Provision.

QUESTION
“I read your article about the WEP and wondered how it might relate to someone like me.

I have earned money which was covered first by the Civil Service Retirement  (CSR) System from 1977 until 2012 when I retired from Federal Service.  Later, I returned to work as a full time contractor covered by Social Security from 2013-2015.  I will turn 62 in 2017.  Do you think that I would gain or lose retirement income if the WEP was changed?

Also, I wondered if the change would affect my eligibility to gain a portion of my husband’s pension if he should die first.  He has always been covered by Social Security and at 67 is currently retired.  However, it is my understanding that if he precedes me, I would receive none of his pension.   Would a change to the calculation of benefits affect this?

Lastly, would it be worth my while to return to work?  As you can see, I only have about 12 quarters of earnings under Social Security and would need about 28 more to have 40 quarters.  In addition to earning more money, having a bigger retirement check would be attractive.  (This is important since my family is long-lived… Mom and Dad are still going strong at 90+.)  Yet, under the current WEP getting a bigger pension check due to Social Security didn’t seem possible.

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