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Social Security transfer from USA to UK

Social Security transfer from USA to UK

Old Oct 29th 2011, 9:25 am
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Default Social Security transfer from USA to UK

I worked in the UK for 10 years before moving with my family to the USA in 1980 where I worked for 20+ years.
I returned to retire to the UK in 2006 and in 2008 at age 60 applied for my UK State Pension. This was calculated using my contributions, contributions made by my ex-husband and buying back previous years' contributions for which I paid out about £7000.
Last month I applied for my USA pension and was told that because of my UK pension, my USA pension would be almost halved. Is this correct? It seems ludicrous that I would have been better off had I no UK pension at all and having to pay £7000 for the privilege...!!
I would be grateful for any advice as to what I should do.

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Old Oct 29th 2011, 10:57 am
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Default Re: Social Security transfer from USA to UK

Originally Posted by Jayjay123 View Post
I worked in the UK for 10 years before moving with my family to the USA in 1980 where I worked for 20+ years.
I returned to retire to the UK in 2006 and in 2008 at age 60 applied for my UK State Pension. This was calculated using my contributions, contributions made by my ex-husband and buying back previous years' contributions for which I paid out about £7000.
Last month I applied for my USA pension and was told that because of my UK pension, my USA pension would be almost halved. Is this correct? It seems ludicrous that I would have been better off had I no UK pension at all and having to pay £7000 for the privilege...!!
I would be grateful for any advice as to what I should do.

Jayjay123
I'm not familiar wiith the exact way this works, but try an advanced search on the USA and MBTTUK forums for threads containing the term "WEP" or "windfall elimination provision" - you'll find a lot of previous threads explaining and discussing this. You could Google these terms also, but you'll probably find it easier to read the explanations on here first.

Essentially, though, what you describe sounds about right. The only way to be exempt from the WEP as far as I know is if you had 30 years of SS payments.
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Old Oct 29th 2011, 2:40 pm
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Default Re: Social Security transfer from USA to UK

Originally Posted by dunroving View Post
I'm not familiar wiith the exact way this works, but try an advanced search on the USA and MBTTUK forums for threads containing the term "WEP" or "windfall elimination provision" - you'll find a lot of previous threads explaining and discussing this. You could Google these terms also, but you'll probably find it easier to read the explanations on here first.

Essentially, though, what you describe sounds about right. The only way to be exempt from the WEP as far as I know is if you had 30 years of SS payments.
Yes this.
if you have 30 or more years the windfall elimination doesn't apply, but less means they deduct for other pensions you are receiving.
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Old Oct 29th 2011, 3:03 pm
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Default Re: Social Security transfer from USA to UK

If you look down a couple of pages of this article, you will see an explanation of WEP.

http://www.washingtonpost.com/wp-srv...arp061405.html
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Old Oct 31st 2011, 1:33 pm
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Default Re: Social Security transfer from USA to UK

WEP applied to US SS applies to anyone in US or overseas that receives any pension that was not subject to Social Security tax when the pension was earned.
So whether it is a UK pension or a US sourced pension from income that did not contribute to SS (for instance a state or local government retirement scheme for teachers) then it gets WEP'd.

Fair, no, we earned the two pensions so we should receive them but we get penalized by the US in their attempts to slow down the shrinking of the US SS pot.
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Old Nov 3rd 2011, 10:05 am
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Default Re: Social Security transfer from USA to UK

Originally Posted by J.JsOH View Post

Fair, no, we earned the two pensions so we should receive them but we get penalized by the US in their attempts to slow down the shrinking of the US SS pot.
It might not initially seem fair, but there is a good reason for it as the SS calculation for periods of work less than 30 years is biased as it calculates SS income as if you were a long term low average wage earner and you get a higher percentage of your income replaced by SS.

"Social Security benefits are intended to replace only a percentage of a worker’s pre-retirement earnings. The way Social Security benefit amounts are figured, lower-paid workers get a higher return than highly paid workers. For example, lower-paid workers could get a Social Security benefit that equals about 55 percent of their pre-retirement earnings. The average replacement rate for highly paid workers is about 25 percent.

Before 1983, people who worked mainly in a job not covered by Social Security had their Social Security benefits calculated as if they were long-term, low-wage workers. They had the advantage of receiving a Social Security benefit representing a higher percentage of their earnings, plus a pension from a job where they did not pay Social Security taxes. Congress passed the Windfall Elimination Provision to remove that advantage."
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Old Nov 3rd 2011, 10:26 am
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Default Re: Social Security transfer from USA to UK

Originally Posted by Jayjay123 View Post
I worked in the UK for 10 years before moving with my family to the USA in 1980 where I worked for 20+ years.
I returned to retire to the UK in 2006 and in 2008 at age 60 applied for my UK State Pension. This was calculated using my contributions, contributions made by my ex-husband and buying back previous years' contributions for which I paid out about £7000.
Last month I applied for my USA pension and was told that because of my UK pension, my USA pension would be almost halved. Is this correct? It seems ludicrous that I would have been better off had I no UK pension at all and having to pay £7000 for the privilege...!!
I would be grateful for any advice as to what I should do.

Jayjay123
In 2010 the maximum WEP was $381 and also cannot be more than one half of your non-SS pension. So how much SS did the SSA say you'd be getting with and without WEP, and how much is your UK pension? I actually find it hard to believe that you'll be worse off with the UK pension and WEPed SS than without the UK pension and full SS. But if this is the case you can always not take the UK pension.

Last edited by nun; Nov 3rd 2011 at 10:57 am.
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