mrken30

That's what I thought. this is the IRS definition:
A 403(b) plan (also called a tax-sheltered annuity or TSA plan) is a retirement plan offered by public schools and certain 501(c)(3) tax-exempt organizations.

I don't think it pays into Social Security, but I may be mistaken.

this is the article that raised my concerns

http://www.theeducatorsretirement.co...-windfall.html

Pulaski

According to the article, at least some people who are teachers are not contributing to SS, and so will get caught up in the WEP web. I haven't read the whole article, but the part I did read reinforced what I already knew - that when it come to WEP there is no substitute for contributions to SS.

ONLY income from retirement investments funded from income that has already been subject to US payroll taxes is exempt from the reaches of WEP.

So, were you paying into SS?

scot47

I know lots of US citizens who end up with no entitlement to social security pensions in old age. The UK system has traditionally made it possible for voluntary contributions to top up entitlement even when working outside the UK. I know a few ex-colleagues from UK now reaping the rewards from that ! I am one of them !!!!!!!!!!!!!!!!!!:e ek:

mrken30

This is the problem , non profits are not required to withold social security taxes. In my case they are so I should be ok. Below is the SSA reference to this.

https://www.ssa.gov/pubs/EN-05-10027.pdf

durham_lad

If you create an online account with Social Security then you can find your contribution record by clicking on the tab labeled "Earnings Record". It will show your SS earnings for every year.

https://secure.ssa.gov/RIL/SiView.do

Giantaxe

A 403(b) is equivalent to a 401(k) for the categories you state. It's not germaine to a discussion about WEP/GPO because that is governed on whether there was employment where Social Security contributions were not made.

mrken30

I think all employers that have 401k schemes will pay social security taxes. Some employers that are able to have 403(b) plans , do not have to withhold social security. In these cases you may not accrue social security and therefore get hit with WEP.

Pulaski

I agree, and that is more or less what I said in post #30, above.
I agree. If you're contributing to a 401(k) you likely, absent SS fraud by your employer, have little to worry about regarding SS, but if you're offered a 403(b) that is a flag that your employer might legitimately not be making SS deductions and sending them to the SS administration.

Giantaxe

The most common scenario that leaves someone exposed to WEP/GPO is holding multiple jobs over the course of a career, one or more of which are not obliged to make SS deductions.

nun

In the vast majority of cases people that pay into 403b accounts (rather than 401ks) because they work for non profit organizations will also be paying FICA tax,,,,ie SS tax. If you are a Government or certain states employee you might be exempted from SS tax....but you will still pay the Medicare portion of FICA.

Most university and college employees will pay into a 403b plan. If you are exempt from (SS as for example MA state workers are) you will also have mandatory contributions to a 401a (a state pension) that replaces SS.

In my case I worked at the University of Massachusetts and had 401a state pension mandatory deductions and could also pay into a university 403b plan and a state workers 457 plan. I have 18 years of FICA paymenys and my 401a pension will be used to calculate WEP...not the 403b or 457.

nun

403b accounts are not taken into consideration in WEP calculations, however, 401a accounts are. The lady in the example has a Georgia State Teacher;s pension (401a) and a 403b......the WEP will have been calculated on the 401a pension as that is the mandatory replacement for SS that any organization that is exempted from SS must offer it's employees.

mrken30

Why is life so simple?