United States Representative Jo Ann Emerson Serving Missouri's 8th District

Contact me at: 132 Cannon Washington, DC 20515 (202) 225-4404 or joann.emerson@mail.house.gov

Social Security: The Windfall Elimination Provision

BACKGROUND INFORMATION:

The Windfall Elimination Provision (WEP) was enacted in 1983 and applies to retirees with highly compensated government service and brief, relatively low paid Social Security covered (private sector) employment from having their Social Security benefits calculated under the more favorable formula used only for retirees with lowest Social Security earnings. The WEP formula determines the percentage of a retiree's monthly Social Security check withheld if they are also eligible for a federal, state or local government pension. The WEP formula assumes an individual has higher government-job earnings over the course of their careers which yields, on a percentage basis, substantially lower Social Security benefits.

PROBLEM:

Lower paid government employees who have previously worked in the private sector and paid into the Social Security system are finding that their Social Security benefits are being substantially reduced (up to 50%) because they also received a government pension.

CONGRESSIONAL ACTION:

Representative Bruce Vento introduced H.R. 372, the Public Pension Parity Act of 1999, which allows public-sector retirees to deduct a portion of their governemnt pension in the same fashion as private pension recipients. Currently, government pensions are fully taxed, while the pension benefits of private sector retirees are not. This bill was introduced to the House Ways and Means Committee on January 19, 1999. Representative Jo Ann Emerson is one of 22 cosponsors of the bill.