Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
WEP questions
Old 11-19-2014, 01:06 PM   #1
Confused about dryer sheets
 
Join Date: Nov 2014
Posts: 4
WEP questions

I worked for a state agency for 16 years , leaving there in 1986 and taking out my contributions in 1987 . Therefore , technically , I never will get a pension . I recently applied for SS to begin at age 62 and a few months and was told by the SS rep that I may be subject to the WEP which shocked me . She said they will check to see if the contributions were all my own or if I was vested - I told her I took out my own money and paid a penalty so how is that a pension ? Then she seemed confused - she made some comments in the Comments section and said that SS will check with the State agency . I called them and they did not have much knowledge of the WEP - they just said I took my money out in 1987 , approx. $14000 and I had a zero balance . It was all my own money PLUS interest which I guess could make it a pension since I did not pay into SS there .

Does anyone have any knowledge of this ? SS sent me a letter with the amt I will get assuming that I do not get a state pension . I don't want any big surprises so may have to delay my retirement . : (
I see there is a lump sum pension calculator on the SS website - because I was only 34 when I took the money out in 1987 , using their calculator , I believe I would only lose $84 a month . Here is a link to the calculator :


https://secure.ssa.gov/poms.nsf/lnx/0300605364 ALso , I know there is a low pension guarantee that they cannot take more than half of a non covered pension away . Am I figuring this correctly ? TThey told me that without the WEP , my SS at 63 would be $950 - thanks for anyone who is more knowledgeable about this than I am. It seems so unfair to be penalized several times over for a lousy $14000 I took 28 years ago and never was notified about since the law just passed .

It seems that some people are getting hit really hard so I am asking is the WEP based on the PIA at 66 or do they recomputed then take the small pension into acct ? Thanks for any info -
__________________

__________________
chercat is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 11-19-2014, 02:29 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
braumeister's Avatar
 
Join Date: Feb 2010
Location: Northern Kentucky
Posts: 8,582
Since you're apparently not receiving a pension from them, I don't see how the SS WEP could possibly apply.

FWIW, I did a few years part time teaching a while back. Part of my pay was withheld for the state teachers' pension program, and when I quit I withdrew it all (and paid taxes on it). When I filed for SS, nothing was ever said about WEP, so I would imagine you're the same.

Just be sure when talking to SS reps that you ask lots of questions and document the conversation carefully.
__________________

__________________
braumeister is online now   Reply With Quote
Old 11-19-2014, 03:33 PM   #3
Thinks s/he gets paid by the post
Tadpole's Avatar
 
Join Date: Jul 2004
Posts: 1,169
According to the NEA faqs, it depends on your vesting/eligibility:

Quote:
What happens if I withdraw my government pension from non-SS-covered employment in a lump sum (that is, I take my employer contributions, my contributions, and interest as a single payment)?

It is treated as a government pension for WEP purposes. The pension-paying agency will usually prorate the lump sum to determine a monthly amount for WEP purposes. If it does not, the SSA has a method for determining the amount.

Do I avoid the reduction under the WEP if I move from non-SS-covered employment to SS-covered employment?

No, you won't unless you forfeit your right to the government pension from the non-SS-covered employment. You forfeit it by withdrawing your contributions and interest before you are eligible to receive such a pension. If you withdraw your contributions and interest after you are eligible to receive such a pension, SSA treats the withdrawal as a lump-sum pension and your Social Security benefit is subject to the WEP. It makes no difference whether you are working in Social Security-covered or non-SS-covered work before you are eligible for your Social Security benefit. The rule turns on whether you are eligible for the pension from the non-SS-covered work.
Example: Chris is a teacher and works in California, a state in which teachers are not covered by Social Security. She withdraws her employee contributions and interest before she is eligible to receive a pension from such work. She then moves to the state of Washington, where teachers are covered by Social Security. She begins to teach there and remains there for the remainder of her career. Because Chris has forfeited her right to a government pension from the California employment by withdrawing her employee contributions and interest, the WEP will not apply to her.
NEA - FAQs About the Windfall Elimination Provision
__________________
Tadpole is online now   Reply With Quote
thanks
Old 11-19-2014, 05:12 PM   #4
Confused about dryer sheets
 
Join Date: Nov 2014
Posts: 4
thanks

Thanks for replying , Tadpole .
Yes, I am afraid that will be the case .
But to me ,I did forfeit the pension because I withdrew the money in a lump sum which was only $14000 and I would have had to wait 21 years to get the pension as I was only 34 at the time .
AND all the contributions were my own - did you take a look at the link I posted or are you familiar with the SSA lump sum pension calculator ? I just want to make sure I am figuring my loss correctly should they deem that I am subject to the WEP .
ALso , they gave me a figure of $949 without the WEP as the amt I should receive . If I am interpreting the calculator correctly , do you come up with the same figure I do - $84 or $42 ( low pension guarantee that they cannot take more than half a small pension ) off that figure or is there more to it than that ? Will they recomputed the WEP amt since I am not getting a monthly pension ever ?
This is very confusing to me - it seems odd because if I left in 1985 I would not be subject to any WEP -seems like bad timing and a bit unfair .
__________________
chercat is offline   Reply With Quote
Old 11-19-2014, 07:29 PM   #5
Thinks s/he gets paid by the post
Tadpole's Avatar
 
Join Date: Jul 2004
Posts: 1,169
Calculators: Online Calculator (WEP Version)

The amount you gave appears to be the monthly pension value of your payout. If so, get your actual SS statement and plug the required numbers in the calculator above.
__________________
Tadpole is online now   Reply With Quote
Old 11-19-2014, 08:03 PM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
harley's Avatar
 
Join Date: May 2008
Location: Following the nice weather
Posts: 6,418
Man, I was all excited. Finally, a topic I have some expertise in. I was going to explain about 802.11b WLAN security, encryption, and the problems with it not providing end to end security. Dammit.


I know absolutely nothing about SS.
__________________
"Good judgment comes from experience. Experience comes from bad judgement." - Will Rogers, or maybe Sam Clemens
DW and I - FIREd at 50 (7/06), living off assets
harley is offline   Reply With Quote
Old 11-19-2014, 08:37 PM   #7
Thinks s/he gets paid by the post
Tadpole's Avatar
 
Join Date: Jul 2004
Posts: 1,169
"The worker must have been eligible to receive a retirement or disability pension payment (either monthly or lump sum) from the pension plan before 1986 for the WEP exemption to apply."

chercat, The above statement is from your link. My interpretation is you are not exempt? You read it differently? Do you know what "eligible" means in this context?

How many years will you have with substantial SS earnings. At some point WEP becomes small. See the table:
http://www.socialsecurity.gov/retire2/wep-chart.htm
__________________
Tadpole is online now   Reply With Quote
lump sum
Old 11-20-2014, 01:15 PM   #8
Confused about dryer sheets
 
Join Date: Nov 2014
Posts: 4
lump sum

I was looking at it like this - if I took a lump sum retirement at age 34 but was eligible to take it after 10 years then that would have been 1980 , well before 1986 . But it looks like you are saying that I would have had to be at least 55 to be " eligible " to take that lump sum prior to 1986 ? I wish it said that a bit more clearly - it could be interpreted that this was not a monthly sum retirement then, because I definitely would have been able to take it out years earlier .
It also seems odd to me that a person who takes out their own $ within 9 years and is age 54 is exempt yet a person who takes it out after 10 years at a young age is penalized when they hit retirement age.
I understand the " theory " of equity and the so-called double dipping , but Reagan definitely did not think this through .
__________________
chercat is offline   Reply With Quote
Old 11-20-2014, 02:25 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
chercar..... Are you looking for an answer as to how WEP will impact your SS? Or are you looking for a politically charged discussion as to whether the current WEP rules are "fair," make sense, pass your common sense test and that sort of thing?
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
both ?
Old 11-20-2014, 02:50 PM   #10
Confused about dryer sheets
 
Join Date: Nov 2014
Posts: 4
both ?

Sorry about that - I guess a little of both

Just seems illogical to me that if it is a lump sum retirement and I guess it appears that it is , then if I could have taken it prior to 1986 with 10 years then I would be exempt . If they meant to clarify by adding " must be at least 55 and eligible to take a lump sum retirement prior to 1986 " then there would have been no question in my mind .
__________________
chercat is offline   Reply With Quote
Old 11-20-2014, 03:03 PM   #11
Thinks s/he gets paid by the post
Tadpole's Avatar
 
Join Date: Jul 2004
Posts: 1,169
chercat: I see you aired this same question at Bogleheads earlier this month with a similar discussion and unofficial interpretations of eligibility. Dollar-wise I don't think it affects your benefits at all if you spent most of your career paying into SS.
__________________
Tadpole is online now   Reply With Quote
Old 11-20-2014, 03:08 PM   #12
Thinks s/he gets paid by the post
Tadpole's Avatar
 
Join Date: Jul 2004
Posts: 1,169
And I wouldn't waste time obsessing on the fairness of grandfather type clauses, especially 30 year old political ones.
__________________
Tadpole is online now   Reply With Quote
Old 11-20-2014, 04:41 PM   #13
Thinks s/he gets paid by the post
martyb's Avatar
 
Join Date: Nov 2006
Location: Bossier City
Posts: 2,182
Agree...no point stressing, WEP has been around a long time & is likely here to stay. I also agree it doesn't sound like it's going to affect you too much, if at all. Personally, WEP will reduce my SS to around $250 per month when I reach age 62
I am about a month away from my 57th birthday now.

Sent from my SAMSUNG-SM-G900A using Early Retirement Forum mobile app
__________________
“Change is the law of life. And those who look only to the past or present are certain to miss the future.”
-John F. Kennedy

“Hard work never killed anybody, but why take a chance?” - Edgar Bergen
martyb is online now   Reply With Quote
Old 11-21-2014, 07:26 PM   #14
Thinks s/he gets paid by the post
nun's Avatar
 
Join Date: Feb 2006
Posts: 4,835
WEP is going to apply as long as you have a benefit from non-SS wages. When you left your state employment the SSA will have been advised of any DB pension or 401a ( DC plan) balance and they will use that to do an annuity calculation to calculate your WEP. The fact that you took out a lump sum does not change the application of WEP.
__________________

__________________
“So we beat on, boats against the current, borne back ceaselessly into the past.”

Current AA: 65% Equity Funds / 20% Bonds / 7% Stable Value /3% Cash / 5% TIAA Traditional
Retired Mar 2014 at age 52, target WR: 0.0%,
Income from pension and rent
nun is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
WEP ... I thought I understood this. Peter FIRE and Money 8 11-11-2013 12:52 AM
Social Security WEP Reduction? DMGO FIRE and Money 117 03-11-2013 05:13 PM
Survivor benefits and WEP or GPO bbohardt FIRE and Money 15 01-08-2012 05:51 PM
WEP/GPO SS Webinar info mickeyd FIRE and Money 25 03-12-2011 09:31 AM
WEP Password TromboneAl Other topics 6 07-31-2006 12:31 PM

 

 
All times are GMT -6. The time now is 01:29 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.