WEP and HR 711

[Neill]

H.R.711 - Equal Treatment of Public Servants Act of 2015

Is proposing to calculate WEP using data of income to correct what is claimed to be a general over compensation of WEP.
The bill allows an employee to submit their own data. Has anyone put any though into how this would affect expats and immigrants who get WEPed?
I am assuming SSA wouldn't get the earnings data from foreign countries so you would have to somehow submit it yourself. Then again they have some exchanges of information to handle the totalization agreements.
Just stumbled on this via the following article:

http://www.yourhoustonnews.com/kingwood/opinion/social-security-advisory-board-backs-brady-wep-repeal-impacting-teachers/article_b250dc18-42c5-51bb-9c0f-425d0b5fc9b9.html

This got me to this doc that's very interesting from the SSA:

http://ssab.gov/Portals/0/Reports/WEP_Position_Paper_2015.pdf?ver=2015-10-02-104201-183

 

[txtig]

This is the first I've heard of this bill. DW will be impacted by WEP, so it's encouraging that this bill has been introduced. But, that's all that has happened so far - it's been introduced in the House . . . back in February of this year. It doesn't appear that anything else had happened since. I guess we'll just have to wait and keep our fingers crossed.


Sent from my iPad using Early Retirement Forum

 

[Gumby]

I would rather see them do something about the Government Pension Offset. If my young wife had sat home, eating bonbons and watching soaps all these years, she would get one-half of my SS benefit when I predecease her. But because she got up off her duff and went off to work as a schoolteacher, the GPO will prohibit her from receiving a survivor benefit.

 

[txtig]

They ought to do something about both. But, it's probably more likely that neither will be addressed.

 

[Sue J]

DH and I were just discussing WEP last night. He gets a government pension and also has 36 Social Security credits. He needs just 4 more to get anything from SS.

So we went to the SS site and put in his income history for his SS working years and then did the calculations for what the possibilities would be and the WEP impact. I showed him all the years from age 62 to 70. I had done all this a few years ago but he never was all that interested.

If he earned $5040 in 2016 ($1260/credit) or sometime after that he could get a small sum which is not essential for our lifestyle but would be nice. He's so close, needing only 4 more credits!

So he's thinking it would be worth it and trying to get motivated to earn something next year. We'll see if that really happens. He used to work in social services but does not want to go back in that field. I suggested trying a temp agency and seeing what he would be interested in doing.

If WEP was magically changed that would make his completing his SS credits all that more worthwhile. If it's not we'll be fine, even if he never completes his last 4 credits.

 

[nun]

This has been a big topic of conversation on British expat websites. Its still isn't obvious if it will pass or in what form, either eliminating WEP or having the WEP calculation changed. Up to now for foreign non-SS earnings related pensions you just had to tell SSA about the amount you received when you applied for SS. Many times SS payments from other countries do not trigger WEP, but the rules are complicated and often debatable as to how they are applied.

 

[Sunset]

DH and I were just discussing WEP last night. He gets a government pension and also has 36 Social Security credits. He needs just 4 more to get anything from SS.

So we went to the SS site and put in his income history for his SS working years and then did the calculations for what the possibilities would be and the WEP impact. I showed him all the years from age 62 to 70. I had done all this a few years ago but he never was all that interested.

If he earned $5040 in 2016 ($1260/credit) or sometime after that he could get a small sum which is not essential for our lifestyle but would be nice. He's so close, needing only 4 more credits!

So he's thinking it would be worth it and trying to get motivated to earn something next year. We'll see if that really happens. He used to work in social services but does not want to go back in that field. I suggested trying a temp agency and seeing what he would be interested in doing.

If WEP was magically changed that would make his completing his SS credits all that more worthwhile. If it's not we'll be fine, even if he never completes his last 4 credits.

You are very wise, its so much to the his benefit to work a little bit more and get those last 4 credits. !!

He can even do it as self employed, perhaps he has a hobby that can generate money. But a temp agency is easiest and no long term commitment.

 

[Sunset]

This got me to this doc that's very interesting from the SSA:

http://ssab.gov/Portals/0/Reports/WEP_Position_Paper_2015.pdf?ver=2015-10-02-104201-183

So I quickly read this paper and noticed in their nice example how they talked about "replacement rate" .

Its true, if someone works 15 yrs in SS covered job and another person works 35 yrs in the same job.
The person with the low number of years, gets a low averaged income and therefore gets a higher replacement rate. This has nothing to do with whether or not the low number person worked anywhere else.

SS also has this "problem" when you have the example of 2 people working different jobs one pays high, for 35 yrs and one pays low for 35 yrs. The low paid person will get a higher replacement rate.

This "problem" would not exist if SS was a straight line percentage.

However using the term replacement rate does tend to obscure the fact that in both examples the low avg worker will get less from SS than the high avg worker.

 

[theOAP]

Two points of interest on this topic:

First, have a look at the composition of the Social Security Advisory Board. It's on the last page of the SSAB link. The current Bill before the house may not advance, and that is not unusual for any legislation concerning WEP (there have been others in the past), but the backing of the SSAB in recalculating benefits as exemplified in this Bill seems to indicate, at least to me, that IF there were any changes to WEP, this method of calculation would be favoured at this time, or in the immediate future. According to the report, "WEP" is seen as an unpopular taking away of benefits. The new method, as mentioned above, would be seen (the committee hopes) as simply an adjustment to SS benefits.

Second, it would be assumed (!) any new calculation must be seen to offer a "cost neutral" result. Nun found an example for the results under the House Bill, and the SSAB seem to be adjusting that method somewhat. What appears to happen is those on lower incomes receive a boost in benefits over the current WEP system, whilst those with higher earnings actually see a reduction in SS benefits when compared to those received under the current WEP system. The current 30 year threshold for WEP also disappears. As a result, the new method of calculation may well be "cost neutral", with both winners and losers when compared to the current WEP system.

 

[RE2Boys]

DH and I were just discussing WEP last night. He gets a government pension and also has 36 Social Security credits. He needs just 4 more to get anything from SS.

So we went to the SS site and put in his income history for his SS working years and then did the calculations for what the possibilities would be and the WEP impact. I showed him all the years from age 62 to 70. I had done all this a few years ago but he never was all that interested.

If he earned $5040 in 2016 ($1260/credit) or sometime after that he could get a small sum which is not essential for our lifestyle but would be nice. He's so close, needing only 4 more credits!.

Well advised to get those last four credits. I earned my 40th credit in the year AFTER I had retired from federal civil service. In addition to making me eligible for SS, I was able to claim SS for my dependent sons.

 

[2soon2tell]

Gumby,

Well said. My DW is in the same position regarding the GPO.

I wish someone could enlighten me as how this is fair treatment for teachers.

 

[powerplay]

DH and I were just discussing WEP last night. He gets a government pension and also has 36 Social Security credits. He needs just 4 more to get anything from SS.

So we went to the SS site and put in his income history for his SS working years and then did the calculations for what the possibilities would be and the WEP impact. I showed him all the years from age 62 to 70. I had done all this a few years ago but he never was all that interested.

If he earned $5040 in 2016 ($1260/credit) or sometime after that he could get a small sum which is not essential for our lifestyle but would be nice. He's so close, needing only 4 more credits!

So he's thinking it would be worth it and trying to get motivated to earn something next year. We'll see if that really happens. He used to work in social services but does not want to go back in that field. I suggested trying a temp agency and seeing what he would be interested in doing.

If WEP was magically changed that would make his completing his SS credits all that more worthwhile. If it's not we'll be fine, even if he never completes his last 4 credits.

I also receive a government pension although I have 38 credits. I thought it might be nice to qualify for SS so that medicare B could come from that, but I don't think my reduced SS with the 40 credits would cover medicare B. So far I can't find the motivation to consider working to get 2 more credits. If some form of legislation should pass changing WEP then my motivation level may rise.