magpye

I'm coming up to 62 so a couple of weeks ago, knowing I was going over to the UK, I thought I would find out what information I needed to apply for the UK Pension. That's when I saw they wanted to know my Social Security # so I started a google search to find out why on earth they would want that information. Like you I was born in UK and was not understanding what my SS # had to do with anything. Oh boy have I been enlightened in the last week. I knew I would have to pay US tax on it but never did it enter my head they would deduct from my US Pension. I cant believe nobody mentioned it as I know quite a few British living here. Wish I had known this years ago and then I could have planned better and I would have definitely make NI contributions. On well can't do much about it now, but it has made me change my plans and hold off getting the US SS for another 4 years.

lansbury

alaska2471

I have tried to read and keep myself informed about my UK Pension and social security and I find that I am not the only one in the dark about WEM. I turned 62 yesterday and started to receive my UK pension in January, had 10 years of work so I receive about a third of the weekly amount, all earned before 1979. I applied for my social security in November 2013 and as I had not heard anything called back yesterday, this is when I was told I would need to bring in my UK letter so that they could see the amount I am receiving.The application form said are you applying in another country, I put yes. Nowhere did it tell you to inform them when you started to receive it. The 30 year rule never even crossed my radar, so now with 27 years worked in the US I will lose up to 50% of my UK pension.

Giantaxe

If you have 27 years of US SS contributions, the most your SS can be reduced is $122.40 a month (less if your UK pension is less than twice that):

http://www.socialsecurity.gov/retire2/wep-chart.htm

magpye

I think a lot of us were completely in the dark about WEP. From what I have found out in the last few days, you wont lose any of your UK Pension. Its the US SS that will be reduced. But you will be better off than me as you worked 27 years in the US, and I believe the longer you work the less you lose .. I only worked 13 years.

theOAP

+1

robin1234

I do understand the chagrin and dismay of people who are only finding out about WEP late in the day. I think it is part of a bigger picture, where information about retirement, retirement planning, investment etc. from good organisations like AARP and from mainstream magazines like Kiplingers (just for instance) always seems to assume that readers are born and brought up and spend their whole lives in the US. It does seem odd, since supposedly the US is a land of immigrants.

It may be one of those chicken and egg problems with the web - if you Google WEP or windfall elimination you get all the info you need, but unless you have heard about it you wouldn't search for it.

I guess I do reluctantly admit the fairness of WEP. Many people have an employment record of fifty years or more, age 16 to 66 for instance. If 25 years of British NIC plus 25 years of US SS would yield a higher income than 50 years of US SS eligible employment, then it is fair that SS should be reduced accordingly. However, it is odd that US SS makes an issue of it but UK State Pension ignores it.

FatFrank

This WEP thing is a shocker, sounds way too much like socialist mediocracy medeling, and completely the opposit of how most things in the US work...that is the harder you work the more you have the potential to earn.....

Very strange, not fair!

robin1234

Not really. Nothing to do with how hard you work, but whether you would (without WEP) end up with a higher pension by splitting your work life between FICA paying employment and non FICA paying employment (for instance, working in the United Kingdom or in Massachusetts as a town or state employee) than by paying FICA all your working years.

durham_lad

I agree with Robin here, and it is because you earn the bulk of your SS in the early years, it is not linear like all/many/most private pension schemes. (For every year I worked, my private pension increased by 1/60th of my average salary).

alaska2471

Its looks to be about $260 so I figure about $100 of Social security will be reduced.

dunroving

There is a peculiar inconsistency with how UK pension deriving from voluntary NICs are treated, IMO (i.e., they aren't considered when WEP'ing your SS pension, but employment-based NICs are).

durham_lad

That does seem odd but if you put after tax contributions into a deferred annuity contract then payments from that annuity would not be considered for WEP either.

theOAP

I have a question. Joe the plumber works for 20 years in a job where he pays into FICA. Joe plays the lottery. One week, he wins; not a great amount, just $5 million. Joe finds he can retire for life living on the income from the winnings alone and never works again. Are the lottery winnings WEPed?

I have a second question. Joe's sister Sarah is a wiz kid. She graduates from university, joins a Wall Street bank, works for 20 years in dealings, and pays into FICA all those years. At age 42, she finds she has done so well she can now retire and live off her investments for life. WEP?

I have a third question. A person works for 20 years, paying into FICA. They marry and never have to work again. WEP?

I have a fourth question. What is the maximum amount one can receive in US Social Security benefits after 30 years work for 2014? What is the maximum amount one can receive from the UK State Pension if they have contributed for 30 years working in the UK in 2014? Is there a difference between these two amounts? Would an adjustment to the US SS be required to make the benefit for 30 years of maximum contributions 'fair' between the two?

I have a fifth question. Joe the plumber works in the UK for 10 years. He moves to the US and works for 20 years, paying into FICA. During the time in the US, he makes voluntary contributions to the UK State pension. How much will he be WEPed? How much will his final pension be from both pensions combined? His sister Sarah works in the US for 10 years, paying into FICA. She then moves to the UK and works for 20 years paying Class 1 contributions. She cannot pay into US SS. How much will she be WEPed? How much will her final pension be from both pensions combined?

Just curious.

dunroving

Ah yes, I can see the principle behind it.

It seems bizarre that a year of pension credit costng peanuts is not WEP'ed but a year of pension credit based on NI contributions costing £1,000's (albeit pre-tax ££'s) is WEP'ed. But I guess that is more a function of the ridiculously low cost of voluntary NIC's rather than an inconsistency in how WEP is applied.