Originally Posted by Peter124 (Post 11588239)

FWIW I tend to agree with jb82. I think there's a certain amount of wishful thinking going on about the UK pension not being subject to WEP.

Until someone has gone through the process and shown that nun's argument is valid, I remain very skeptical.

I will say that it's a very clever argument, though!

Originally Posted by UK2US1979 (Post 11588553)

SSA have taken the position that all WORK RELATED pension is subject to WEP. "earnings related" or not. So far no one seems to have challenged the SSA position on this nor has any one sought the opinion of the court.

I agree it would be difficult to convince the SSA that the entire basic Pension should be exempt from WEP. Pre 1975 portion may be where one might argue that it does not fall under the provisions of WEP.

Originally Posted by jb82 (Post 11588536)

I was thinking that a uk state pension based on class 2 national insurance might have a better chance of being non wep-able.

It is based on a flat amount of contribution that can be paid whether the person has earnings or not. If you work in the uk you also pay a separate class 4 ni contribution that is based on your earnings which is similar to class 1 contributions (but that doesn't entitle you to the pension).

There is still the point of contention that you have to pay the class 2 contributions if you earn over a certain amount and so get qualifying years via earning a certain amount.

What do you guys think? Also anyone actually had any experience of a class 2 contribution pension being weped

Originally Posted by durham_lad (Post 11588618)

No experience, but in my case I will have 17 years of voluntary NI contributions paid for while living and working in the USA, and the job I worked in the USA also paid into SS so I would argue that 17 years worth of the pension was not related to any non-SS earnings. (I could have chosen to fund an annuity with those contributions and that annuity would definitely not count towards WEP)

Purely academic in my case as I also have private UK pensions.

Originally Posted by dunroving (Post 11588551)

Whichever it is, it seems ludicrous that it should take so long to solve what should be a relatively straightforward question. It's not as if the UK state pension system is shrouded in secrecy.

I think this highlights the problem. We can continue trying to point score about what the "right answer" is or whether someone "shot themselves in the foot" in this grand debating contest, but that doesn't answer the question of what some bureaucratic numpty at US SS will decide is the answer - regardless of whether they are "right" or "wrong".

So far, TheOAP is the only person I know of who has recounted their experience with how this works in practice. I think currently, most people on the BE forum are at least a handful of years from claiming US SS pension so it will be a while before we get some sense of what to expect.

Originally Posted by kodokan (Post 11517904)

We're following an early retirement strategy, and are working on being done and dusted in our early 50s. We'll therefore have 12-15 years of being able to shuffle money about whilst still paying little or no tax, as we'll be living pretty frugally on income derived from our taxable accounts. For some of those years, we'll be drawing down (not closing in one lump) the UK pensions (about $150k total); for others, we'll be doing Roth IRA rollovers; we'll be using Obamacare and balancing income agsinst the subsidies based on 2-4 people in the policy as the kids age out... lots to play with.

The goal is to hit normal retirement age with no UK defined contribution money remaining in the UK or in a pension wrapper, and as much as possible Roth'd over here, then decide when best to pull the trigger in the various small UK company and UK/ US/ Swiss state pensions we'll have coming in from age 65-70. I have a fabulous lifetime spreadsheet running over the next 60 years. :thumbsup:

Originally Posted by R50 (Post 11590988)

I am at the age to retire here in US. Unemployed since few yrs. I have UK company Pension Sec 32 and recent changed in UK law motivating me to cash out my pension for living expenses before I apply for US SS. I have calculated my US Tax situation and will be at or below 15%. Will appreciate your comments and suggestions WEP situation

Originally Posted by dunroving (Post 11591394)

Considering the new UK pension laws, it may be an incentive for those with a UK pension to cash it out rather than take a pension from it, in order to avoid WEP ... ??

ETA: I guess not, as people with a small UK pension will likely have been out of the UK a while, and will have enough US SS contribution years to avoid WEP, and those with just a few years in the US will have a bigger UK pension, and so won't want to take the tax hit on the lump sum withdrawal - but you never know.

Originally Posted by jb82 (Post 11591546)

I imagine most people with UK personal pensions would also qualify for a state uk pension and are likely to be subject to WEP even if they cash out the personal pensions so avoiding WEP doesn't have much to do with the decision to cash out or not.
Or as you say many with small pensions have worked 30 years in the USA and are not subject to WEP anyway.

Originally Posted by R50 (Post 11590988)

I am at the age to retire here in US. Unemployed since few yrs. I have UK company Pension Sec 32 and recent changed in UK law motivating me to cash out my pension for living expenses before I apply for US SS. I have calculated my US Tax situation and will be at or below 15%. Will appreciate your comments and suggestions WEP situation

Originally Posted by jb82 (Post 11591546)

I imagine most people with UK personal pensions would also qualify for a state uk pension and are likely to be subject to WEP even if they cash out the personal pensions so avoiding WEP doesn't have much to do with the decision to cash out or not.
Or as you say many with small pensions have worked 30 years in the USA and are not subject to WEP anyway.

Originally Posted by dunroving (Post 11591394)

Considering the new UK pension laws, it may be an incentive for those with a UK pension to cash it out rather than take a pension from it, in order to avoid WEP ... ??

ETA: I guess not, as people with a small UK pension will likely have been out of the UK a while, and will have enough US SS contribution years to avoid WEP, and those with just a few years in the US will have a bigger UK pension, and so won't want to take the tax hit on the lump sum withdrawal - but you never know.

Originally Posted by nun (Post 11592264)

Cashing out would not avoid WEP. You should tell SSA the lump sum or the DC accumulation and they will calculate an equivalent pension amount to apply to WEP. This is what happens with state employees that have DC accumulations.

Originally Posted by nun (Post 11592264)

Cashing out would not avoid WEP. You should tell SSA the lump sum or the DC accumulation and they will calculate an equivalent pension amount to apply to WEP. This is what happens with state employees that have DC accumulations.