dunroving

Interesting that the two pensions work differently.

Re: the bit in bold, I'm not holding my breath. And my concern is if they screw it up, it will only make things more complicated. I'm still hoping I can use your Roth rollover plan, but my experiences with them convince me they are clueless and unable to think for themselves.

I'll let you know in a couple of years when I plan to withdraw and patriate my TIAA-CREF investments to the UK (over a 2 or 3 year period).

robin1234

Yup, must admit I sniggered mirthlessly when I read that about TIAA-CREF...

UK2US1979

As nun said, you need to be specific about the nature of the basic UK state pension. i.e "not income related" bit..because this is what is being debated here because it is not fully clear. We all would love to hear what the SSA lady have to say about this. However, I think your other private pension and part of the state pension which is based on voluntary contribution may be more than enough to reach the maximum WEP. So, you may never know SSA position on this specific question re basic pension related to "non income related" portion. Unless, of course, you ask her opinion on this.
Personally, I am fairly clear about it after reading nun's posts as reading the wording in the last question of the Calculator and come to an opinion that WEP does not apply to the basic state pension.

theOAP

Making the decision as to when to start SS is always the hard part. Now that Mrs L has made up her mind, it should be straightforward. I really don't think you have anything to worry about concerning your resulting spouse pension. As long as you meet the age requirement, I'm sure you'll receive it, and your spousal benefit should be 50% of her benefit. The caveat always has to be we can't find confirmation on the SSA site that assures that to be the case when foreign pensions might be involved. But then, the SSA information always seems to throw up some confusion, somewhere.

theOAP

I can tell you exactly what one SSA lady had to say about this. The lady was the interviewer with the FBU unit at the US Embassy in London. I'm guessing she came across SSA pension applications from those with a UK State Pension quite regularly.

My application was by phone, and to have approval, I had to certify that all the information as given, and prior to sending the pack to Baltimore, was accurate. As a result, I have copies of all paper work which also includes all her notes on the application. I have those notes in front of me now. Actually, the application is composed of 5 parts.

Part #4, Modified benefit formula questionnaire - foreign pension, is the information concerning my UK State Pension. For the last 2 questions on the first page relating to the dates where she has determined employment was involved in relation to the pension, she has written "Pension based on work after 1956".

Westham

Thanks for the confirmation and I have met the minimum required earnings for every year of my SS, nice to know I'm actually off the hook for this wep con.

UK2US1979

I dont know what is meant by the comment she wrote!
AS you said earlier, your WEP was maxed out by your private pensions alone and as a result, she was not interested in your other pensions details such as basic State pension.l
My guess is that SSA seems to pay more attention to "work related"
as opposed to "earnings related". If so, I think they are wrong. The WEP Calculator, nun referred to speaks of "earnings realted" in the last question.
So, I dont know why they have a conflicting view on this issue that relates to the basic State Pension.

UK2US1979

As I have a couple of hours on my hand this evening, I thought I would study the ruling on the Spanish case.

This is what I found. The link to the court's detailed ruling on this issue:

https://www.cod.uscourts.gov/Documen...-01569-REB.pdf

The following paragraphs are worth noting.

As per POMS..<....Noncovered employment includes employment outside the United States which is not covered under the United States Social Security system. Pensions from noncovered employment outside the United States include both pensions from social insurance systems that base benefits on earnings but not on residence or citizenship, and those from private employers. ...>

< ....plaintiff argues that the ALJ erred in concluding that the WEP applied to his Spanish pension benefits because his receipt of those benefits is based on his Spanish citizenship, not on his earnings...>

<...Under the now-defunct SOVI, a worker was entitled to benefits if he had made at least 1,800 days of “contribution payments” into the program..>

<..As I noted in my previous opinion, the Commissioner’s decision to equate “earnings” with “work” is not clearly justified. Not all “work” one might undertake professionally is necessarily remunerative. ..
....The “contribution basis” is “the amounts to which the contribution rates are applied to obtain the Social Security contributions that individuals deposit in the System, and which constitute their main economic resource...>

<As I noted in my previous opinion, the Commissioner’s decision to equate “earnings” with “work” is not clearly justified........Thus the ALJ’s determination that plaintiff’s SOVI benefits are granted because of his status as a “worker,” as ill-supported factually as it is, ultimately is meaningless in any event...>

Not fully clear on the relevance of "residency", "citizenship" here, though. The Court seems to be of the opinion, that if one became entitled to the Pension because he was a resident /citizen of that country when he made the contributions, this is even more of a reason that such Pension should be outside the scope of WEP as such contributions were outside the jurisdiction of the SSA.

Any thoughts/comments? OAP, nun and others.

robin1234

I'm in England now, but my wife let me know I got the letter from SS confirming that my SS will start in April as I requested, and detailing the amount etc., and also related leaflets etc. Hopefully she'll be able to scan and forward to me, in which case I'll post again in case any light is shed.

When I applied, I let them know I'd be starting a small UK final salary pension this August, and my British state pension at some later date...

dunroving

This may be regurgitating past information but can someone explain in a few words, in lay terms, the following:

What is the main principle or rationale for applying WEP?

[the little I understanding is that in spirit, the intention was to penalise people in the US who put their earnings into a separate pension scheme (local government, private, etc.) instead of into US Social Security. Because US Social Security is (I think) more "generous" on the lower contributions and as you put more in at the higher end, you get less back, people were opting out of US SS with some earnings in order to get better benefits elsewhere with the money that should have gone into US SS. In some ways it seems a bit similar to the whole opting out of SERPS/State Second Pension in the UK. In principle this seems reasonable but it seems to be caching non-US people in the net who, in the spirit of the intended application, probably shouldn't be]

Why should it affect private pensions?

[My US private/professional pension (in TIAA-CREF) isn't WEP'd, I think on the principle that it was money that had already had US SS levied on it.]

In my own case, I paid into US SS for 10 years of my life, and will have paid about 25 years into UK NI. So I already am receiving only a partial state pension from both countries. If I were somehow trying to get a full state pension from both countries, I could see the "You can't have your cake and eat it" rationale ....

This isn't just me having another whinge about fairness (well, maybe just a little), I really am trying to understand the underlying intention of WEP and why it is deemed to be relevant to people who have overseas pensions from years they didn't even live in the US, and didn't even get the chance to pay more than 10 years into US SS.

Westham

I just received my letter from SS on Monday also stating my record and informing me of my estimated monthly amount when I reach 66 in April, also requesting confirmation that I agree with the their record, I counted the years and if I include 2014 (not yet recorded with SS) I have the 30 years vested all over the minimum required earnings. I do not intend to retire for a couple of years so I will apply a little further down the road (hopefully the road is long enough) Just pleased to let some of you know there is light at the end of the tunnel! So no wep for me.

nun

Because US Social Security is (I think) more "generous" on the lower contributions and as you put more in at the higher end, you get less back, people were opting out of US SS with some earnings in order to get better benefits elsewhere with the money that should have gone into US SS. In some ways it seems a bit similar to the whole opting out of SERPS/State Second Pension in the UK. In principle this seems reasonable but it seems to be caching non-US people in the net who, in the spirit of the intended application, probably shouldn't be[/quote]

People cannot opt out of SS taxes, they must work for an employer that is not subject to those taxes; that would be certain states that provide their own state pension plans as a replacement for SS or foreign employment.

nun

The intention is not to penalize but to pay the appropriate amount of SS rather than an inflated amount based on the lower average SS earnings that result form years working and not paying SS tax.

People cannot opt out of SS taxes, they must work for an employer that is not subject to those taxes; that would be certain states that provide their own state pension plans as a replacement for SS or foreign employment.

durham_lad

I think nun covered all your other questions very well. I have 2 private US pensions that are not included in the WEP calculation and 2 private UK pensions that are included in the WEP calculation.

This is because the pensions in the US came from jobs that had "payroll" taxes deducted that go into SS and into Medicare (government healthcare for those 65 and older).

While working my UK jobs I paid nothing into either SS or Medicare. (no US payroll taxes).

I believe the SS calculation has "bend" points so that lower paying jobs get a larger payout in % terms when SS is paid out.

As nun says there is no opt-out option for SS taxes, you either have a job, including self employment, that pays into SS or you have certain government jobs, or jobs overseas that don't pay into SS.

I don't know if US Ex-pats who go on assignments overseas have the option to continue paying into SS or not. (as you know, UK Ex-pats who go on assignments overseas do have the option through voluntary contributions to keep their UK OAP years of service up to date).

I really don't have an opinion on whether the system is fair or not, but I understand why it is in place. I'm retired with 23 years of SS employment so I will be subject to WEP.

nun

The SSA does not allow US expats to pay voluntary SS taxes.