Social Security Hit

To the Editor:

We write to supplement the information contained in the Sept. 8 "Your Social Security" column, written by David Brown, District Manager of the Social Security Administration's Downtown New York office. The topic of Mr. Brown's column was the Windfall Elimination Provision, or "WEP," a little-known provision of the Social Security Law that may affect the Social Security retirement benefits of New York City employees.

Mr. Brown warns readers to "plan ahead." Unfortunately, as he makes clear, if you are nearing retirement, the only planning ahead to be done is to be aware of the effect the WEP may have on your retirement income. Despite what your annual Social Security estimates may suggest, you may be in for a significant reduction in Social Security benefits if you are eligible to receive a city pension that is based, even in part, on years of city service during which you did not contribute to the Social Security program.

In general, city workers who were mandated into retirement system membership (e.g., police officers, firefighters and Teachers) will not be affected by the WEP provision. On the other hand, it may very well affect city employees for whom retirement system membership was discretionary. Those who delayed joining the New York City Employees' Retirement System until later in their public service careers and subsequently bought back pre-membership city service may see unexpected reductions in their Social Security retirement benefits. Because of an agreement entered into by the City of New York and the Federal Government, participation in Social Security was tied to participation in a city retirement system before the 1990s. Therefore, during the years that a city employee was eligible to join a retirement system but chose not to do so, he or she was not permitted to make any contributions to Social Security. When a city employee has bought back service credit for years in which no contributions were made to Social Security, and his or her pension is attributable, even in small part, to those bought-back years, he or she will most likely see a reduction in Social Security retirement benefits.

A city employee who has contributed to Social Security for 30 years of "substantial" earnings will not be affected by the WEP provision. On the other hand, an employee who contributed to Social Security for 20 years or less will see the most severe reduction of benefits. The sliding scale of reductions between 20 and 30 years of Social Security contributions may be found at www.socialsecurity.gov/gpo-wep.

Because the WEP is a topic of interest to city employees that is rarely discussed, we thank Mr. Brown for bringing this provision to the attention of readers of The Chief.

SUSAN SANDERS & MAGDA DECONINCK

Editor's note: Susan Sanders and Magda Deconinck are former Senior Counsels of the Pensions Division of the New York City Law Department. They are currently partners in the law firm of Sanders & Deconinck LLP, specializing in New York City pension law.