How Gov’t Pension affects Social Security

Massachusetts is a “non-Social Security” state. That means that your Massachusetts public employment is not covered by Social Security. Neither you nor your employer pays into Social Security. Instead as a member of the Hampshire County Retirement System you and your employer pay into our system, which is a Government Pension Plan under IRS code 401(a).

Since you and your employer do not pay into Social Security, you do not earn Social Security “credits” or “quarters” for your Massachusetts public employment. However, you may still qualify for Social Security benefits through other employment or through your spouse’s employment. If you are eligible for Social Security benefits you may also be subject to provisions that “offset” or reduce your social security benefits due to your receipt of a government pension. There are two provisions that may affect your receipt of social security benefits: 1) the Windfall Elimination Provision (WEP) and 2) the Government Pension Offset (GPO).

In Summary:

If you are eligible for Social Security benefits (you have 40 credits or quarters) from other employment of your own, then Social Security, under the “Windfall Elimination Provision (WEP)”, may use a “modified formula” to calculate your benefit. Under this provision, your social security benefit will be reduced, but you will still be eligible to receive a benefit.

If you are eligible for spousal or widow’s benefits under Social Security, these benefits may be reduced under the “Government Pension Offset (GPO)” provision. The reduction in spousal or widow’s benefits is 2/3rds of the amount of your Massachusetts pension. Under this provision, your benefit may be reduced or may be totally offset (reduced to zero).

There are exemptions to these provisions. You are exempt from the WEP provisions if 1) you have at least 30 years of “substantial earnings” under the Social Security system.

Medicare coverage is not affected by WEP or GPO offsets

Although you do not have to report Social Security benefits to us, if you receive Social Security benefits you must report your Massachusetts pension and any subsequent COLA’s to Social Security.

Additional information:

To learn more about how the WEP or GPO provisions of Social Security laws will affect you, visit the SSA website at https://www.ssa.gov. The following publications may be helpful to you: "How State & Local Government Employees are Covered by Social Security and Medicare"; “Government Pension Offset” (Pub. #05-10007); “Windfall Elimination Provision” (Pub. #05-10045). New on SSA's website is a WEP calculator and a GPO calculator - Go to: https://www.ssa.gov/planners/retire/anyPiaWepjs04.html for the WEP calculator or https://www.ssa.gov/planners/retire/gpo-calc.html for the GPA calculator .

To learn more about efforts to repeal WEP and GPO provisions, contact the Retired State, County and Municipal Employees Association at 617-723-7283 or click here to visit their website: http://www.massretirees.com