If you worked in federal, state, or local government jobs, or any other employment not covered by Social Security (jobs where Social Security taxes were not deducted from your paycheck), please enter all pensions that you are receiving or will receive from those jobs. We need this information to apply the Windfall Elimination Provision and the Government Pension Offset -- provisions that can reduce the benefits of workers with non-covered employment. If all your jobs were covered, just skip this screen.
Your receipt of a non-covered pension can affect your Social Security retirement benefit through Social Security's Windfall Elimination Provision. Also, your non-covered pensions will affect the amount of spousal and survivor benefits you can receive based on your partner's earnings record via the Government Pension Offset provision.
To add a non-covered pension, click the 'Add' button, then enter the year you will receive your pension and the amount of your annual pension as well as any lump sum payment. Note: The inputs for the Year and the Annual Amount need to be in synch. Generally, the best way to enter non-covered pensions that started in the past is to input the current year and the annual amount you'll receive in the current year.
The % Inflation Indexing equals the Maximum % COLA divided by your Inflation rate. For example, if your pension is increased at the rate of inflation, but not to exceed 2% per year, and your inflation rate is 3%, then your pension is 67% inflation indexed. If your pension is fully indexed, enter 100%. If it is 50 percent indexed, enter 50%, etc. You can enter amounts in nominal dollars or in today's dollars. To edit or delete an entry, click on the row and then on the 'Edit' or 'Delete' button.
If the pension is based on work that is exempt from Government Pension Offset provisions, check the box for 'Exempt from GPO?' To find out if the work is exempt, please see the "When won't my Social Security benefits be reduced?" section of the Social Security Administration's Government Pension Offset publication.