Up until this year, the Windfall Elimination Provision (WEP) limited public sector employees ability to access Social Security benefits. With the introduction of the bipartisan Social Security Fairness Act (HR 82), signed by President Biden on January 5, 2025, now 2.1 million individuals, most of whom are government employees, have gained the ability to access their well-deserved retirement benefits.
Originally, the WEP was created in hopes of minimizing any risk that government employees would “double dip” into both their private pensions and Social Security benefits. The issue arose though in the enforcement of the provision as it effectively penalized those who were working in both sectors, in turn reducing their benefits and deterring them from working in the public sector. With government workforce shortages long being a problem, the WEP was only further deterring individuals from joining government agencies.
At its core, the WEP is a formula that calculates the benefits of employees who receive pensions for roles that are not covered by Social Security, or in other words, have “non-covered pensions.” In these roles, the employee did not have to pay Social Security taxes and, therefore, did not qualify for the corresponding benefits. These noncovered pensions are typically paid for by an employer who does not withhold Social Security taxes from their employee’s salaries. Most often, these employees are state or local government employees or non-U.S. employers. Some examples include teachers, firefighters, as well as individuals who work in foreign service.
Typically, Social Security benefits are calculated by applying three different percentages to an individual’s lifetime average indexed monthly earnings (AIME). Those percentages are then added up, which provides the worker’s monthly benefit total, also referred to as the primary insurance amount (PIA), that they will receive at full retirement age. For most beneficiaries in 2024, the PIA equaled the sum of:
For WEP PIA, the same PIA process remains, but with the 90% reduced to 40% in increments of five percentage points for workers with less than 30 years of coverage (YOCs). This means that workers with 30 or more YOCs have a PIA of 90%, workers with 21-29 YOCs have a PIA between 45-85%, and workers with 20 YOCs have a PIA factor of 40%.
It should be noted that the difference between the typical PIA and the WEP PIA is not permitted to surpass one-half of the individual worker’s monthly noncovered pension supplied by their employer. This is called the “WEP guarantee” and effectively translates to smaller WEP reductions to Social Security benefits.
With so many individuals affected by this law, the Social Security Administration will likely experience a backlog of requests, with some offices predicting it will take more than a year to fully disseminate all benefits owed to the retirees who’ve been affected by the WEP. If you or your loved one has been affected by the WEP and the subsequent Social Security Fairness Act, contact the experienced team of SSDI attorneys at Jan Dils Attorneys at Law today for support in navigating your claim.
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Jan Dils, Attorneys at Law
