Hotscot

Click on someone's handle at the left and you'll see the function.

lansbury

As Pulaski says you shouldn't really use the PM function to ask questions.

Posting questions in the general forum mitigates the person who responds giving you incorrect information, as others will see it and be able to correct it. We all try and give correct answers but we are all prone to thinking we know more than we do. Secondly posting your questions in the forums gives others the opportunity to learn from the responses you receive.

durham_lad

+1

My US SS will be reduced by the WEP maximum amount of ~$500/month because of the pensions I earned in jobs that did not contribute to the US SS, which in my case are UK pensions and UK OAP. When I filled in the forms to start receiving my UK pension, paid to me in the USA, there was no suggestion at all that it would be reduced because of other pensions, foreign or domestic.

It will be the same with OAP, there is no UK equivalent of WEP.

Note that if you have 30 years of contributions into US SS then there is no WEP. ( I have 23 years and the US has no equivalent of voluntary contributions )

AZ_Alba

I believe it only applies to government pensions, such as state or military. Private pension are not included nor are government pension amounts due to voluntary contributions.

Pulaski

That is my understanding too, more or less (not sure about the military, but I have no reason to doubt it). The whole matter of WEP is IMHO spurious and capricious.

durham_lad

It also applies to pensions earned in foreign countries. From the SSA website,

"If you work for an employer who does not withhold Social Security taxes from your salary, such as a government agency or an employer in another country, any pension you get based on that work may reduce your Social Security"

http://www.ssa.gov/pubs/EN-05-10045.pdf

MMcD

Correction....now all you have to do is separate the wheat from the chaff..and then take the rest with a healthy grain of skepticism whilst keeping in mind that there are some here who know everything 'bout everything and waste no time in setting out to instruct the rest of us.

There's also an ignore button.

Seriously tho - This forum is a gold mine of fantastically helpful information - some about quite arcane matters - which often can't be found anywhere else.
So

hutchiebug

I'll certainly drink to that!

robin1234

Nor are government pensions included if the government employment is included in Social Security, i.e. The employee paid SS taxes.

My wife, for instance, has a MA pension and a NY pension. The MA will result in WEP, and the NY won't, because NYS employees pay SS taxes and are included in social security. So it's not really a case of whether it's a government pension or a private one, it's whether the employment was included in social security or not.

Michael

From my understanding, the main purpose of WEP is to try to be fair to Americans that work for companies that only collect social security taxes. Some government agencies have the option of opting out of social security but charge their employees an equivalent amount as social security for their pension. If an employee works for that agency for 20 years and works for another employer for 20 years that withholds social security taxes, that employee will get about 33% more total benefits than what they would have received if they worked those 40 years paying only social security taxes but both would have paid the same amount into pensions.

The reason that differences occur is that social security only counts 30 years maximum to determine the social security benefits that are paid.

audi4t

35 years actually 😀

Below is from SS web site:


If you stop work before you have 35 years of earnings, we use a zero for each year without earnings when we do our calculations to determine the amount of retirement benefits you are due.

Even if you have 35 years of earnings, some of those years may be low earnings years. Those low earnings years will be averaged in, creating a lower benefit than if you had continued to work.

JAJ

The maximum WEP reduction in 2014 is $408 a month. This is based on a reduction in the first tier average monthly earnings factor ($816) from 90% to 40%. In addition, the reduction is limited to 50% of the non-SS pension on which the WEP is calculated.
http://www.ssa.gov/pubs/EN-05-10045.pdf

So not clear how you could get to a $500 a month reduction. In fact, if you have 23 years of contributions to U.S. Social Security then the first tier rate (after WEP) should normally be 55% instead of 40%. So the WEP reduction is $816 times (90% - 55%) = $286.

hutchiebug

Hello - I have a question.

I sent off my State Pension app, to start 1SEP14. Yesterday I received an estimate from the Pension Service. However, it was just for my State Pension, with no mention of my five years deferrment.

I called the Pension Service this morning and was told that the extra State Pension estimate (my deferred years credit) letter would come closer to the date I'll receive my pension. He explained it is a two-step process, first the basic State Pension calculation and then the Extra Pension calculation, whether it be lump sum or extra payment every week.

Has anybody else deferred their pension and had two separate estimate letters?

Thank you,

Hutchiebug