Ask Larry

Why Should My 401(a) Plan Be Called A Pension?

I am having difficulty discerning if a 401(a) in a no benefits part-time OPS (temp) position is considered a pension? It is the primary retirement product being offered but with no employer contribution. If it is is considered a pension and I am 1 year short of 30 substantial pay years, it seems I will have social security benefits reduced by what I save in the 401a plan. If 401(a) is more akin to 401K, why should that be called a pension?

Thank you, your assistance is deeply appreciated.

Hi. If the 401(a) plan you refer to is your employer's primary retirement plan and if you don't pay Social Security taxes on your earnings, then it would almost certainly count as a pension plan for purposes of the Windfall Elimination Provision (WEP). That's true even if your employer doesn't make contributions to the plan. I can't explain why that is, other than that's what Congress decided on when they passed the WEP provision into Social Security law in the 1980s (

However, if you do in fact have 29 years of 'substantial earnings' as defined in the WEP provision, then any effect that your 401(a) plan may have on your Social Security retirement benefit rate will be relatively small. I would guesstimate the potential reduction in your monthly benefit rate to be no more than around $50, but our software (( could provide you with much more accurate figures.

Best, Jerry

May 23 2022 - 6:34pm
MaxiFi software running on a laptop
Get What's Yours!
Discover tens of thousands in extra retirement dollars with Maximize My Social Security software!
  • Find your maximized strategy
  • Unlimited what-ifs
  • Step-by-Step filing instructions
  • Our software's lifetime-benefit increase for an illustrative couple earning $65K each and planning to take retirement benefits at 62.

    Results will differ based on your specific case and filing strategy.

Getting Started is Easy
Web-based software. Works on ALL browsers. No download.