There's been plenty of discussion here about WEP and UK pensions - I've read loads of it but couldn't find a definitive answer to my question.

I'm already taking my US SS pension - took it at age 62. At the "interview" I informed the FBU that I would have future pensions in the UK but I had no idea at the time what they'd be worth. I'm now nearly 65. My UK state pension is due when I'm 66 so that's not "in play" yet. However, I have two UK company pensions, whose normal retirement age is 65. One is very small - a DC pension that I started in 2011 and only contributed 7 years. The other is a little unusual - it's already in the form of a deferred annuity, due to the company going bankrupt in the 90s and the pension fund ending up with trustees, and eventually the Pru. However, I am minded to defer both these company pensions because I don't need them yet. So the question is - when does WEP come into play, when a pension becomes eligible or when I start taking payments from it? I'm pretty sure I have to let the FBU know something sometime. Anybody know for sure?

You need to inform US SS when you start to receive your UK pensions. If you know in advance when those payments will definitely start, and the amounts, personally I would tell them then to avoid any delay in WEP being applied and having a possible over payment of SS to account for.

Thanks. So, to be clear, if I defer all three pensions, I don't need to tell the FBU until I start taking one of them? I like your answer - I only ask because I've seen debates about the age of "entitlement" is the significant time, especially with regard to UK state pension.

Regardless, I would try and tell the FBU in plenty of time for the reason you describe. In my experience they're not the quickest.

The latter- when you start taking payments from it.

You are entitled to UK state pension at whatever age it is now, but you can defer to a later time, in which case the payments increase. That could effect the amount of the WEP so until you have signed up to take the pension noting can be calculated.

Once you're passed retirement age (or is it 55? .... I think it is) I'd just look into cashing out/ drawing down any "very small" pensions. I have several small pension funds in the UK and when I retire I am considering do that, perhaps as a stop-gap to fund living expenses between retiring and drawing SS and my UK state pension i.e. using the small pensions to enable me to defer drawing the SS/ state pensions.

Yes, that's an option I've considered. The bad news, of course, is that once I take my very small UK pension then my US SS will be WEP'd. Not by the full amount admittedly, but WEP'd nevertheless. So in real terms I won't be getting the full value of that pension. My thinking for now is that I'd be better off using cash/savings for the next year or so and defer everything else - including possibly deferring withdrawals from my IRA until the markets recover (hopefully). I can afford to use cash/savings for the time being (after all it's getting next to nothing in savings and I'm loathe to invest it, given that I already have an IRA) - so I think using that is the wisest thing to do. Thoughts?

Thoughts? .... If you cash out for a lump sum, I don't think your SS will be WEP'ed.

I'd be interested to know if you or anyone else knows why WEP would ensnare a lump sum cash out.

Ah, didn't realise you meant lump sum. I don't know the answer to that.

Really don't wish to hijack this post, but wondering if anyone can offer any thoughts to my predicament concerning WEP and my social security payment. Moved stateside in 03 as a dual national after paying into British NI for about 30 years. Reached retirement age in Dec 2020 and my first payment received in Jan 2021 for $411 per month , reduced to $267 after medicare deduction. My British pension also started around 600 pounds per month. Earlier this year I received a letter from social security more or less asking me if I was receiving any other payments so I booked an appointment in my local office and stated my 600 pounds British payment. Yesterday I received a letter saying my monthly social security will be redu8ced to $113 per month and I need to repay over $2600 by September! This has really come as a complete shock and with no other income I'm not sure how I can pay this. I have the right to appeal. I had no idea such a small amount per month would become such an issue and now causing a great deal of stress. Can anyone see a way around this?

So it sounds like you paid into SS for 17, or maybe -18 years?

Intuitively the WEP reduction looks excessive to me as it is supposed to be capped, but I have not experienced WEP myself. Also WEP declines the more years that you pay into SS (but you have to pay into SS for 20 years before the effects of WEP start to decline, and WEP only ends entirely after 30 years of "substantial" SS contributions). At this point, unless you have been sent a breakdown of the calculation already, all I can recommend is that you reperform the calculation yourself. The SS administration have an on-line calculator you can use, though the workings are opaque - you put in numbers and it tells you what your net SS payment should be, it doesn't give separate "before, WEP, and after WEP" figures.

To your final question, having already retired there is no way "around" this, the die is cast and all you can do is make sure that the numbers being used are correct. The only area that I believe is open for negotiation is the repayment of the excess payment already received - I would guess that the SS administration would accept monthly payments over an extended period.

IIRC there is embedded in the SS rules an option to un-retire once, but I don't remember the details and I am assuming that you are not kean to reenter the workforce for another 2-3 years.

To follow on from what Pulaski has said. If you have 20 years of less SS contributions you get assessed WEP at the maximum amount. If I am remembering correctly how it works, the numbers do look about right.

There is no way around WEP unless you have 30 years SS contributions. Do use the online calculator linked by Pulaski, it was correct to within $1 to what SS worked my wife's SS to be after WEP. You can appeal the SS calculations, you can't appeal WEP.

Thanks Pulaski and Lansbury for your quick replies. Looks like my retirement plans are screwed. I had doubts about surviving on a combined US/UK monthly pension of under a $1,000 now its down to about 800 with a debt to repay!

Yes, that's unfair- you've worked and paid taxes, and WEP is being applied to you, but not to those who haven't worked for it and have just paid a token 2 or 3 pounds a week "voluntary contributions". And further, working over 20 years is unlikely to bring any relief from WEP as you will likely be missing some "substantial earnings" years.

However, if you work, that will increase your SS, and it will increase it by several times more (relative to earnings) than those with good SS.

This isn't the place to go into a detailed analysis, but WEP is a crude way to address the peculiar maths behind social security calculations, which are deliberately designed to be very generous to those on very low income, and generous to those on low income.

The problem arises because the SS calculations cannot distinguish between someone who worked for their entire life on very low income and someone who only contributed to SS for part of their life, so had "low" income for the purposes of SS, but in fact had also worked and accrued non-SS pension savings. This is not well explained, especially not ahead of retirement, and when sprung on people can seem to be grossly unfair.