The Windfall Elimination Provision and CSRS Offset Retirees

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By on September 26, 2007 in Current Events, Retirement with 0 Comments

I was looking at some of the comments on my article "Windfall Elimination and Your Retirement Future" (WEP) and several readers asked for some information as to what the WEP does to CSRS Offset retirees.  Now, CSRS Offset folks are an exclusive bunch; and if you don’t know what I mean by CSRS Offset – you are not one of them.

CSRS offset employees are employees who were vested in CSRS as of 12/31/1986, had a break in service of over one year and chose CSRS Offset over FERS upon their return to federal service.  The fact that they are vested in CSRS is what makes them subject to the WEP.

The good news is that many CSRS Offset employees have enough years of substantial earnings under Social Security to either eliminate or mitigate the WEP.  A link to the Social Security factsheet on the WEP was included in the September 26th article and the sheet contains a list of what constitutes substantial earnings.

It takes 30 years of substantial earnings to eliminate the WEP.  More than 20 years of substantial earnings can mitigate it.  To determine how many of these years you have, take your most recent Social Security Statement and compare the annual earnings out of which Social Security taxes were withheld with the substantial earnings thresholds.  If you’ve got 30 – you’re home free.

Agencies can request to have John Grobe, or another of Federal Career Experts' qualified instructors, deliver a retirement or transition seminar to their employees. FCE instructors are not financial advisers and will not sell or recommend financial products to class participants. Agency Benefits Officers can contact John Grobe at [email protected] to discuss schedules and costs.

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About the Author

John Grobe is President of Federal Career Experts, a consulting firm that specializes in federal retirement and career transition issues. He is also affiliated with TSP Safety Net. John retired from federal service after 25 years of progressively more responsible human resources positions. He is the author of Understanding the Federal Retirement Systems and Career Transition: A Guide for Federal Employees, both published by the Federal Management Institute. Federal Career Experts provides pre-retirement seminars for a wide variety of federal agencies.