%0 Journal Article %J Social Security Bulletin %D 2014 %T The Social Security Windfall Elimination and Government Pension Offset Provisions for Public Employees in the Health and Retirement Study %A Alan L Gustman %A Thomas L. Steinmeier %A N. Tabatabai %K Employment and Labor Force %K Income %K Pensions %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %X This article uses Health and Retirement Study data to investigate the effects of Social Security's Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) on Social Security benefits received by households. The provisions reduce benefits for individuals or the dependents of individuals whose work histories include jobs for which they were entitled to a pension and were not subject to Social Security payroll taxes ( noncovered employment). We find that about 3.5 percent of households are subject to either the WEP or the GPO, and that the provisions reduce the present value of their Social Security benefits by roughly one-fifth. Households affected by both provisions experience benefit reductions of about one-third. Under the WEP, the Social Security benefit reduction is capped at one-half of the amount of the pension from noncovered employment, which substantially reduces the WEP penalty and prevents the WEP adjustment from falling disproportionately on households in the lowest earnings category. %B Social Security Bulletin %I 74 %V 74 %P 55-69 %G eng %N 3 %4 Retirement Policies/Wage Level and Structure/Wage Differentials/Public Sector Labor Markets/labor Force Participation/Earnings/Pensions/Public Employee/Social Security/Windfall Elimination Provision/Government Pension Offset %$ 999999 %0 Report %D 2013 %T The Social Security Windfall Elimination and Government Pension Offset Provisions for Public Employees in the Health and Retirement Study %A Alan L Gustman %A Thomas L. Steinmeier %A N. Tabatabai %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %X This paper uses data from the Health and Retirement Study to investigate the effects of Social Security s Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) provision on Social Security benefits received by individuals and households. WEP reduces the benefits of individuals who worked in jobs covered by Social Security and also worked in uncovered jobs where a pension was earned. WEP also reduces spouse benefits. GPO reduces spouse and survivor benefits for persons who worked in uncovered government employment where they also earned a pension. Unlike previous studies, we take explicit account of pensions earned on jobs not covered by Social Security, a key determinant of the size of WEP and GPO adjustments. Also unlike previous studies, we focus on the household. This allows us to incorporate the full effects of WEP and GPO on spouse and survivor benefits, and to evaluate the effects of WEP and GPO on the assets accumulated by affected families. Among our specific findings: About 3.5 percent of households are subject to either WEP or to GPO. The present value of their Social Security benefits is reduced by roughly one fifth. This amounts to five to six percent of the total wealth they accumulate before retirement. Households affected by both WEP and GPO lose about one third of their benefit. Limiting the Social Security benefit to half the size of the pension from uncovered employment reduces the penalty from WEP for members of the original HRS cohort by about 60 percent. %I Ann Arbor, The University of Michigan %G eng %U http://www.mrrc.isr.umich.edu/publications/papers/pdf/wp288.pdf %4 public Pensions/retirement planning/social Security/Public Policy/government pension offset/windfall elimination provision %$ 69116