Preparing retirees for changes in the Social Security Equity Act
Well, this morning there's good news for the nearly 3 million former public employees who paid into Social Security but had their benefits reduced or eliminated due to pension offsets. The Social Security Fairness Act of 2024 was just signed into law a few weeks ago. Millions of retirees will be affected, especially teachers, firefighters, and police officers. Here, CAPTRUST Vice President and Financial Advisor Catherine McCall explains the details of this new law. Thank you very much for your participation. I'm glad to be here. Understood. Please explain a little about the purpose of this law and who exactly it affects. The aim was therefore to eliminate government pension offsets and windfall provisions. So these are two provisions of the Social Security Administration that basically say that even if you paid for a full 10 years to become an eligible employee, if you were paying into Social Security, then you Indicates whether you held another job as a civil servant. Teacher, as a firefighter, as a police officer, I'm sorry, but you get a pension from those people, but no matter how much money you put into it, you're not going to get that much from Social Security. So this repeals that law and basically says, “Hey, you paid during this period, in addition to what you earned, you should have earned it in other ways, at least in the form of Social Security.'' You will receive an amount for you' government pension. So, God, imagine this isn't going to happen without some kind of price. Just a little bit. Unfortunately, the law does not specifically specify how these costs will be paid. Well, it's a bit of a blank check. The government currently estimates that the increase in payments from the Social Security Administration will result in an additional $200 billion in costs over the next 10 years. By the way, our company is on the verge of bankruptcy. In other words, it will be another six months before the social security administration approaches bankruptcy. Therefore, there is no doubt that some important decisions will be made in the near future. About the whole program. But it's not good. It's good, but it's not good. It depends on your point of view. Yes, of course. And a lot of that perspective really depends on the timeline. So when does this take effect? Also, what should beneficiaries keep in mind? In other words, as long as you've been paying into Social Security for at least 10 years, you can qualify for Social Security benefits, regardless of whether you enter the workforce and get a job in the civil service. If you are eligible and currently receiving Social Security, the administration, the Social Security Administration, already knows that you are subject to the GPO, which is the windfall elimination provision and the offset of your applicable government pension. I am. It will enter automatically. Since they already have that information, the profit increase should apply automatically. Understood. So if you actually start doing this, the law says you have to start paying the additional amount by December of this year. Oh, I understand. So there are a few dates until January 2024. That means you can win a lot of money. Understood. So it could be a lump sum. Understood. To get back to that number. Unfortunately, the Social Security Administration is still reading the law and considering how to implement it. Therefore, there is no specific timeline as to when it will be released. Okay. Please let me know if that change starts happening. Because, again, it sounds pretty fluid. AB
Preparing retirees for changes in the Social Security Equity Act
Updated: January 22, 2025 4:35 PM PST
The Social Security Equity Act of 2024 promises relief for approximately 3 million former public employees affected by reductions or elimination of Social Security benefits through WEP (Windfall Elimination Provision) and GPO (Government Pension Offset) rules. I am doing it. The recently signed law aims to rescind these provisions, thereby benefiting retirees such as teachers, firefighters, and police officers. Kathryn McCall, CFP and Financial Advisor at CAPTRUST, discusses how individuals previously affected by a role transition from the private sector to the public sector will now receive fair compensation without pension penalties. It emphasizes what you can do. ” A typical example is someone who works for the first 10 or 15 years. They quit their private sector careers (paying into Social Security) and then decide to become teachers or firefighters and are no longer paying into the program,” McCall said. “These people were previously subject to government pension offsets.” “It will now actively count their government pensions toward the amount paid and eligible for Social Security benefits. Importantly, The bill lacks a clear fiscal plan, raising concerns among critics who expect the federal debt to increase by $200 billion over the next decade. This could accelerate Social Security bankruptcy by another six months. Regarding implementation, the Social Security Administration is reviewing its procedures and payments are expected to be retroactive to January 2024, with monthly payments increasing by December 2025. No action is required by the beneficiary as an adjustment will occur. Read more about California's top stories | Subscribe to our morning newsletter
The Social Security Equity Act of 2024 promises relief for approximately 3 million former public employees affected by reductions or elimination of Social Security benefits through WEP (Windfall Elimination Provision) and GPO (Government Pension Offset) rules. I am doing it.
The recently signed law aims to rescind these provisions, thereby benefiting retirees such as teachers, firefighters, and police officers.
Kathryn McCall, CFP and financial advisor at CAPTRUST, explains how individuals previously affected by the transition from private to public sector roles can now receive fair compensation without pension penalties. It emphasizes what you can receive.
“A typical example is someone who works in the private sector for the first 10 or 15 years of their career (while paying into Social Security) and then decides to become a teacher or firefighter and stops paying into the program.” said McCall.
“These people were once subject to government pension offsets, which positively count their government pensions against the amount they paid that they were eligible to receive as Social Security benefits.”
Importantly, the bill lacks a clear fiscal plan, raising concerns among critics who expect the federal debt to increase by $200 billion over the next 10 years. This could accelerate Social Security's collapse by another six months.
Regarding implementation, the Social Security Administration is reviewing its procedures, and payments are expected to be retroactive to January 2024, with monthly payments increasing by December 2025. Beneficiaries do not need to do anything, as the adjustment is automatic.
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