If I can retire at 65 from a Public Employees Benefit Plan and don't wish to file for Social Security until 66 yrs and 2 months, can I collect all moneys in the PERS account until I file for Social Security? I will actually file for my ex-husbands Social Security as he made more than me during prime earning years.

Obviously this seems really unfair, because I worked and earned both Social Security and PERS, but I believe this to be true. What percentage and/or how do they decide what amount to be given to the retiree also for both SS and PERS?

Thanks,
Suzanne

Hi Suzanne,

If you paid Social Security taxes on your earnings while you worked under the PERS plan then your PERS pension wouldn't affect your Social Security benefits. But, if you didn't pay taxes on your earnings while you worked under the PERS plan then it would likely result in both a lower Social Security retirement benefit on your own record and an offset of at least part of your divorced spousal benefits. The Social Security provisions involved are the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) provision. WEP can only affect Social Security benefits payable based on a person's own work record, while GPO can only affect auxiliary or survivor benefits payable on someone else's record, such as an ex-spouse.

The WEP provision doesn't reduce Social Security benefits by a specific percentage. The WEP formula is too involved for me to try to explain here, but you can learn about it by reading this Social Security publication: https://www.ssa.gov/pubs/EN-05-10045.pdf. By the way, the WEP provision never causes Social Security benefits based on a person's own work record to be reduced to zero.

When applicable, the GPO provision causes Social Security auxiliary or survivor benefits to be reduced by 2/3rds of the amount of the beneficiary's government pension (https://www.ssa.gov/pubs/EN-05-10007.pdf). So, depending on the relative amounts of the person's Social Security benefit and government pension it's possible that their Social Security auxiliary or survivor benefit could be reduced to zero.

Bottom line, if you didn't pay Social Security taxes on the earnings on which your PERS pension is based and you apply for divorced spousal benefits, your divorced spousal benefits will likely be offset by 2/3rds of the amount of your PERS pension. If you have the option of taking your PERS pension in a lump sum or optional withdrawal rate, Social Security would likely prorate your lump sum or distributions into a monthly rate that would then be used to calculate the amount of offset to your divorced spousal benefits (https://secure.ssa.gov/apps10/poms.nsf/lnx/0202608400). However, the offset wouldn't apply unless and until you've started receiving your PERS pension or lump sum distribution.

Our maximization software handles the calculations involved for both WEP and GPO cases, so you may want to strongly consider using it to determine your best strategy for claiming your benefits.

Best, Jerry