What you need to know about Social Security and your TRSL retirement
September 4, 2018
TRSL members may be eligible for Social Security benefits through their spouse or from another job in which they paid into Social Security. However, under federal Social Security law, these benefits may be reduced or even eliminated upon receiving a retirement benefit from TRSL.
So, why will my Social Security benefits be reduced or eliminated?
Originally, the State of Louisiana was not allowed to participate in Social Security to provide coverage for its public employees. Later, when Social Security was opened up to public employees, Louisiana did not opt into coverage. Because of this, most TRSL members do not pay Social Security payroll taxes through their TRSL-covered employment. The type of Social Security benefit a TRSL member is eligible to receive determines how Social Security reductions will be applied. Here’s an explanation of the two reductions that may impact TRSL members—Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO).
Windfall Elimination Provision (WEP). This law applies to TRSL members (excluding Plan B members) who also worked in other jobs where they paid into Social Security, making them eligible for Social Security benefits on their own earnings record.
Social Security looks at the number of years that you earned “substantial earnings” and paid Social Security payroll taxes. If you had at least 30 years of substantial earnings, your Social Security benefit will not be reduced. If you worked less than 30 years, the WEP reduction will be applied because the federal government sees your receipt of Social Security on top of your TRSL pension as a “windfall.”
TRSL members affected by WEP could have their Social Security benefits reduced by up to half of the amount of their TRSL pension, but by no more than $447.50 per month in 2018. For example, suppose a retiree receives a $3,000 per month benefit from TRSL, and is entitled to a Social Security benefit of $1,000 per month. Under WEP, the Social Security benefit would be reduced by the maximum of $447.50, leaving the retiree with $552.50 per month in Social Security.
Government Pension Offset (GPO). This is a separate law that applies to the spouses and widows(ers) of retired workers who receive Social Security (also applies to the ex-spouses and surviving ex-spouses, who were married at least 10 years before divorcing and did not remarry before age 60). Social Security pays spousal benefits which can be up to 50% of the retired worker’s Social Security benefit.
Under the GPO, a TRSL retiree would see their Social Security spousal benefit reduced by two-thirds of their TRSL benefit, which could completely eliminate the spousal benefit. For example, suppose a retiree receives a $3,000 per month benefit from TRSL, and is eligible for a spousal benefit of $1,000 per month. The GPO offset is calculated by multiplying $3,000 (the amount of the TRSL benefit) by two-thirds, which equals $2,000. The offset of $2,000 would completely eliminate the spousal benefit of $1,000.
The federal government began paying Social Security spousal benefits more than 80 years ago when most households were single income, and the stay-at-home spouse was financially dependent on the working spouse. Because more families are now two-income households with each spouse having a retirement, the GPO is applied to prevent an individual with a public pension from also receiving a full spousal benefit.
So, why will my Social Security benefits be reduced or eliminated?
Originally, the State of Louisiana was not allowed to participate in Social Security to provide coverage for its public employees. Later, when Social Security was opened up to public employees, Louisiana did not opt into coverage. Because of this, most TRSL members do not pay Social Security payroll taxes through their TRSL-covered employment. The type of Social Security benefit a TRSL member is eligible to receive determines how Social Security reductions will be applied. Here’s an explanation of the two reductions that may impact TRSL members—Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO).
Windfall Elimination Provision (WEP). This law applies to TRSL members (excluding Plan B members) who also worked in other jobs where they paid into Social Security, making them eligible for Social Security benefits on their own earnings record.
Social Security looks at the number of years that you earned “substantial earnings” and paid Social Security payroll taxes. If you had at least 30 years of substantial earnings, your Social Security benefit will not be reduced. If you worked less than 30 years, the WEP reduction will be applied because the federal government sees your receipt of Social Security on top of your TRSL pension as a “windfall.”
TRSL members affected by WEP could have their Social Security benefits reduced by up to half of the amount of their TRSL pension, but by no more than $447.50 per month in 2018. For example, suppose a retiree receives a $3,000 per month benefit from TRSL, and is entitled to a Social Security benefit of $1,000 per month. Under WEP, the Social Security benefit would be reduced by the maximum of $447.50, leaving the retiree with $552.50 per month in Social Security.
Government Pension Offset (GPO). This is a separate law that applies to the spouses and widows(ers) of retired workers who receive Social Security (also applies to the ex-spouses and surviving ex-spouses, who were married at least 10 years before divorcing and did not remarry before age 60). Social Security pays spousal benefits which can be up to 50% of the retired worker’s Social Security benefit.
Under the GPO, a TRSL retiree would see their Social Security spousal benefit reduced by two-thirds of their TRSL benefit, which could completely eliminate the spousal benefit. For example, suppose a retiree receives a $3,000 per month benefit from TRSL, and is eligible for a spousal benefit of $1,000 per month. The GPO offset is calculated by multiplying $3,000 (the amount of the TRSL benefit) by two-thirds, which equals $2,000. The offset of $2,000 would completely eliminate the spousal benefit of $1,000.
The federal government began paying Social Security spousal benefits more than 80 years ago when most households were single income, and the stay-at-home spouse was financially dependent on the working spouse. Because more families are now two-income households with each spouse having a retirement, the GPO is applied to prevent an individual with a public pension from also receiving a full spousal benefit.
| Earned Social Security Benefit |
Spouse's or Widow(er)'s Social Security Benefit |
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What is it? |
Social Security benefit paid to people who worked at other jobs where they paid Social Security taxes long enough to earn a Social Security benefit. | Social Security benefit paid to spouses or surviving spouses of Social Security pensioners if those spouses did not work long enough under Social Security to have earned their own benefit or their earned benefit is less than their spouse's benefit—generally one-half of the benefit paid to the Social Security pensioner. |
| Can it be reduced? | Yes, your earned benefit can be reduced by the Windfall Elimination Provision (WEP), which is a modified benefit formula usually used to reduce your own Social Security earned benefit if you receive a TRSL retirement benefit. However, your Social Security benefit cannot be completely eliminated. | Yes, your spousal benefit can be lowered by the Government Pension Offset (GPO), which reduces your Social Security spouse’s or widow(er)’s benefit by two-thirds of your TRSL benefit. In some cases this offset could entirely eliminate your spousal Social Security benefit. |
Although your Social Security benefit may be reduced or eliminated by these federal offsets, it’s important to remember that your TRSL benefit will not be reduced.
WEP and GPO Exceptions. There are exceptions to both the WEP and GPO. To find out whether you qualify for an exception and more detailed information about how these offsets work, refer to the Social Security Administration’s online fact sheets:
You can also visit the Social Security’s webpage on “Information for Government Employees.”