On January 5, 2025, President Biden signed the Social Security Fairness Act into law. As a result, two long standing provisions have been repealed—the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO)—which have historically reduced Social Security benefits for individuals receiving pensions from non-Social Security-covered employment.
Understanding WEP and GPO
The WEP affected individuals who earned a pension from work not covered by Social Security, as is the case with many public-sector jobs, and worked in positions covered by Social Security. It had the impact of reducing their Social Security benefits by up to 50%. The GPO applied to those who qualified for spousal or survivor Social Security benefits and had a pension from non-Social Security-covered employment, reducing benefits by two-thirds of their government pension.
Implications of the Repeal
The repeal of these provisions is expected to enhance Social Security benefits for approximately 2.5 million retirees— including teachers, firefighters, police officers, and other public servants. The changes are set to take effect for benefits payable beginning in January 2024.
For those affected, this means a substantial boost in retirement income. Estimates suggest that monthly Social Security payments could increase by an average of $360 to $1,190, depending on individual circumstances.
The Social Security Administration is preparing for implementation of the law and will publish more information on their website. We will monitor publications from the SSA on this topic and will keep you informed of significant developments.
Financial Considerations
While the repeal addresses long-standing concerns about fairness for public-sector retirees, it also raises questions about the financial impact on the Social Security system. The Congressional Budget Office estimates that eliminating the WEP and GPO will cost approximately $196 billion over the next decade.
Closing Thoughts
Once enacted, the Social Security Administration will begin adjusting benefits accordingly. Beneficiaries should monitor communications from the Social Security Administration for specific information regarding their benefits and any actions they may need to take.
If you have questions about the Social Security Fairness Act, please reach out to any member of the Labor, Employment and Employee Benefits Team.
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