Yes; the calculations/reductions are done in the following order:
- The retired or disabled worker's benefit is computed under the WEP benefit formula.
- The "potential" benefit as a spouse or surviving spouse is determined based on the other spouse's work record.
- The dual-entitlement provision is applied; under this provision, the "potential" benefit as a spouse or
surviving spouse is reduced by the amount of the person's own Social Security retirement or disability benefit.
- The remaining benefit as a spouse or surviving spouse (if any) is subject to the GPO provision; under
this provision, the spouse/surviving spouse benefit is reduced by two-thirds of the amount of the person's
own pension from non-covered employment.
To illustrate, note the following two examples:
Example - Jane
2000
- Retired from CalSTRS at the age of 60 with a monthly CalSTRS benefit of $1,638.
2005
- Became widowed and is entitled to a surviving spousal benefit from Social Security of $1,305.
Her own Social Security benefit is $680. Because of her non-Social Security covered pension, she is
subject to the GPO. With cost of living adjustments on her CalSTRS pension, she is receiving $1,800
at age 65. She would be entitled to $105 of her surviving spousal benefit (2/3 of $1,800 = $1,200
reduction from potential Social Security benefit of $1,305). In this case, it may be in Jane's best
interests to apply for her own workers benefit of $680 as well as her surviving spousal benefit since
she will be entitled to the greater of the two (as adjusted by WEP and GPO). To determine the amount she
will actually receive, we need to follow Social Security's order of calculations.
- Using the WEP chart , we can determine
the maximum amount of reduction for Jane who turned 62 in
2002 and who had 19 years of Social Security service. This means the maximum reduction is $296
for a benefit on her own record of $384 ($680 - $296 = $384). Her actual benefit amount could be higher.
- Her potential surviving spouse benefit is $1,305.
- Under the dual entitlement provision, her Surviving Spouse benefit of $1,305 is reduced by own
benefit of $384 for a total of $924.
- Finally, apply the GPO reduction to the $924. Two-thirds of Jane's CalSTRS benefit exceeds the $924.
Jane will receive her full $1,800 CalSTRS benefit ($1,638 + COLAs) and a reduced Social Security benefit
of $384 for a monthly total of $2,184.
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No.
No.
Yes. At the time a member files a claim for Social Security benefits, they will be asked about eligibility and/or
receipt of a pension from CalSTRS, and that member is responsible for accurately providing the information.
It is also important to notify the Social Security Administration when you receive the annual cost of living adjustment.
Failure to do so may result in an overpayment of the member's Social Security benefits, which the member would be required to repay.
The Social Security Administration prepares an estimate letter based on Social Security covered employment known at the time
of its preparation. While SSA may be aware of earnings from employment not covered under Social Security, SSA is not aware
of pension eligibility or pension amounts. However, the annual Social Security Statement does include language advising workers
that the benefit may be reduced if they receive a pension from work not covered by Social Security. In addition, beginning in
2007, the Social Security Statement will include language to explain the maximum potential effects of the WEP and GPO to any person
whose records may indicate that they may be subject to those provisions.
No. Social Security benefits are reduced under the WEP and GPO provisions only if the person receives a pension based on their
employment from work not covered under Social Security. There is never any reduction based upon a pension someone may receive
from a spouse's employment that was not covered under Social Security.
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